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(Seoul=NSP NEWS AGENCY) = Samsung Electronics' operating profit for the third quarter fell short of market expectations, primarily due to a decline in semiconductor (DS) division profitability, driven by sluggish smartphone and PC sales, which negatively impacted memory chip shipments.

On the 8th, Samsung Electronics announced its Q3 results, reporting consolidated sales of KRW 79 trillion and an operating profit of KRW 9.1 trillion.

Sales increased by 6.66% compared to the previous quarter, but operating profit decreased by 12.84%. Year-on-year, sales rose by 17.21%, while operating profit surged by 274.49%.

The operating profit fell significantly below the market forecast of KRW 10.77 trillion, as aggregated by financial information provider FnGuide. Securities firms had already revised their initial estimates of KRW 13-14 trillion down to around KRW 10 trillion, but the actual result still missed even those lowered projections.

Although detailed results by division were not disclosed, industry analysts estimate that operating profit in the semiconductor (DS) division fell from KRW 6.45 trillion in Q2 to around KRW 5 trillion in Q3. Weaker demand for smartphones and PCs led to a decline in memory chip shipments. In addition to sluggish memory growth, the profitability of high-bandwidth memory (HBM) also fell short, further dragging down the overall semiconductor sector's profitability.

There is also speculation that part of the provisions related to performance-based incentives (OPI) has been factored into the results. Samsung's Q3 earnings conference call is scheduled for October 31.

By Eun-young Huh(eunyoung114@nspna.com) and Jeonghwa Choi(choijh@nspna.com)

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