Samsung & LG Preliminary 2Q Results
Samsung Electronics (005930.KS) has been a beneficiary of the increased demand for semiconductors that has pushed the space into shortages and a bit of panic buying. As the global leader in DRAM production, Samsung should see the results of the increases seen in DRAM pricing in its 2Q results, and while the company will not give details until the full conference call later this month, Samsung released its preliminary sales and operating profit estimate last night. The company reported sales of 63t won ($55.4b US) against consensus estimates of ~60t won and operating profit of 12.5t won ($10.99b US) against consensus of 11.3t won, which puts sales down ~3.7% q/q but up 18.9% y/y and operating profit up 33% q/q and up 53.4% y/y.
While Samsung does not give detail when it releases preliminary numbers, the general consensus is that the quarter saw a one-time gain from a ‘take-or-pay’ deal with Apple (AAPL) of ~500b won ($439.7m US) and that much of the strength in the quarter came from semiconductors, where DRAM prices rose 26.7% in 2Q, after a 5.3% increase in 1Q, leading to an expected 22% increase in operating profit for the segment. Expectations for smartphones are less sanguine, with shipments down substantially from 1Q as Galaxy S21 sales slowed, and while y/y comparisons for Samsung Display (pvt) will show the reduction in SDC’s large panel production, we expect display to see positive results as panel prices rose through the quarter, albeit less for small panels where Samsung shines. Details later this month.
While Samsung does not give detail when it releases preliminary numbers, the general consensus is that the quarter saw a one-time gain from a ‘take-or-pay’ deal with Apple (AAPL) of ~500b won ($439.7m US) and that much of the strength in the quarter came from semiconductors, where DRAM prices rose 26.7% in 2Q, after a 5.3% increase in 1Q, leading to an expected 22% increase in operating profit for the segment. Expectations for smartphones are less sanguine, with shipments down substantially from 1Q as Galaxy S21 sales slowed, and while y/y comparisons for Samsung Display (pvt) will show the reduction in SDC’s large panel production, we expect display to see positive results as panel prices rose through the quarter, albeit less for small panels where Samsung shines. Details later this month.
DDR (DRAM) 4.8Gb Average monthly Pricing - 2020 - 2021 - Source: DRAMeXchange
LG Electronics (066570.KS) also reported 2Q preliminary results of 17.11t won ($15.05b US) and operating profit of 1.11t won ($967.4m US), up 48.4% and 65.5% y/y respectively but down 3.9% and 37% q/q after a record 1Q.. Both were in line with consensus estimates. The continued strength at LGE is expected to have come from both the appliance business and the TV space, where increasing OLED TV sales and higher LCD TV prices have helped to narrow the gap between the two. As the company has closed its mobile division, 2nd quarter results will see that as a discontinued operation and 1Q results will be adjusted to reflect same. Details from the company later this month.
RSS Feed