Samsung Electronics Co. reported earnings that beat profit estimates, as rising internet use during the Covid-19 pandemic boosted chip demand and gadget sales.
Net income was 5.5 trillion won ($4.6 billion) in the three months ended June, the company said in a filing on Thursday, compared with the 4.9 trillion won average of estimates compiled by Bloomberg. Samsung had reported preliminary numbers earlier this month that showed operating profit rose 23%.
The world’s largest maker of memory chips and smartphones had warned of a second-quarter sales slump in its consumer business. However, smartphone sales started to pick up from June after stores reopened and demand for gadgets and TVs revived, according to several analysts including Daishin Securities’ Park Kang Ho. As people continued to stay home and consume internet-based services like movie streaming and video conferencing, server clients rushed orders for memory chips, which lifted prices.
“While Covid-19 impacted Samsung’s earnings in the first half of 2020, we foresee an earnings recovery from the second half, especially in mobile, consumer electronics and display divisions despite a weak memory business,” Peter Lee, analyst at Citigroup Inc., said in a note ahead of Thursday’s release.