Samsung forecasts profit rise of 78 per cent to £4.13 billion

Samsung Galaxy S6

Increase will be first quarterly profit growth for world’s biggest smartphone maker for two years

Samsung has said it expects third quarter operating profit to reach 7.3 trillion wan (£4.13 billion) on the back of strong sales from its semiconductor and LCD panel business.

That will mark a 78 per cent profit growth on Q3 2014, when Samsung posted 4.1 trillion wan (£2.3 billion) profits, and the first quarterly increase in two years for the manufacturer.

The guidance exceeded analyst expectations of 6.8 trillion wan, with most crediting Samsung’s chipset business as the reason behind the profit boost.

The analysts also downplayed the impact of Samsung’s handset business on the figures, claiming

“The smartphone division is on a gradual downward trend due to competition and commoditisation,” Nomura analyst CW Chung told the Financial Times. “Samsung is not a growth stock . . . the share price will be decided by how much it can reduce the discount from bad shareholder returns.”

Shares at the world’s biggest smartphone business jumped by nearly nine per cent in response to the forecasted figures.

The Korean manufacturer is due to publish full results for its third quarter later this month.