|Bid||56.29 x 1800|
|Ask||56.30 x 1800|
|Day's range||56.02 - 56.74|
|52-week range||48.84 - 62.22|
|Beta (5Y monthly)||0.41|
|PE ratio (TTM)||12.73|
|Forward dividend & yield||2.51 (4.46%)|
|Ex-dividend date||08 Oct 2020|
|1y target est||N/A|
(Bloomberg) -- Samsung Electronics Co. warned earnings in the current quarter will decline, saying the strong growth in its mobile and memory business that helped third-quarter profit beat will ease amid intensifying competition and weakening demand.The world’s largest maker of memory chips and personal electronics said net income rose a better-than-expected 52% to 9.27 trillion won ($8.2 billion) in the three months ended September, beating the 7.54 trillion won average of estimates. Samsung foresees capital spending of about 35.2 trillion won this year because of a migration to more advanced chip processes and a buildout of its contract chipmaking business.The South Korean technology giant’s tepid outlook may fuel concern that the remarkable tech sector rally during the pandemic may have run its course. The company joined fellow chipmakers Micron Technology Inc. and Intel Corp. in warning that demand from server customers will weaken amid an inventory correction. Samsung also forecast rising competition in mobile phones and consumer electronics and said it will have to boost spending on marketing.”Concerns over disruptions in supply chain drove chip demand from cloud operators early this year due to the Covid-19 pandemic but the demand cooled down as inventories kept rising,” said Park Sung-soon, an analyst at Cape Investment & Securities. “We are seeing a correction in the memory chip market in 4Q but memory chip prices are expected to rise next year when hyperscalers start expanding their investment in servers.”Samsung Electronics shares have surged nearly 40% from their March lows. The stock slipped as much as 2.4% on Thursday after the earnings report, the most in more than a month.Click here for a live blog on the numbers.Sales of Samsung smartphones jumped nearly 50% during the September quarter as the rollout of its latest Galaxy Note series and a new foldable device reignited demand for premium handsets that had flagged during the coronavirus pandemic. Phone shipments totaled 88 million units, while tablet PCs reached 9 million during the period, according to the company, which is seeking to regain the lead as the world’s largest smartphone maker after losing the crown earlier this year to Huawei.Shelter-in-place measures continued to boost sales of consumer electronics, particularly of higher-end televisions, according to the company. But uncertainties over the pandemic will linger and costs are expected to increase heading into the year-end peak season, it added.Read more: Turns Out, People Do Buy Gadgets in a Pandemic: Tim Culpan“The mobile communications business is likely to see smartphone sales decline and marketing costs increase due to competitive market environment. In consumer electronics, profitability is expected to weaken on growing competition and rising costs, despite solid demand,” Samsung said in the earnings release. “For 2021, the company expects a recovery in overall global demand but uncertainties will remain over the possibility of recurring epidemic waves of Covid-19.”Overall demand for memory exceeded expectations in the third quarter, boosted by rush orders from Huawei Technologies Co. ahead of U.S. sanctions that kicked in last month as well as other mobile customers. While mobile may continue to remain strong in the fourth quarter and into the first half, server orders are likely to be weak with the prolonged pandemic prompting clients to slow orders, Samsung said.Server memory prices are already correcting. Contract prices for 32-gigabyte DRAM server modules fell 9% in the September quarter, according to InSpectrum Tech Inc. Prices for 128-gigabit MLC NAND flash memory chips decreased about 8% in the third quarter. Micron cut capital spending plans last month, warning about weaker demand from some corporate customers and forecast possible oversupply of flash memory chips next year.With its main mobile and chip units set to slow, Samsung is looking to newer businesses to bolster growth. The contract chipmaking division posted record quarterly revenue and the company expects to exceed the industry’s high-single-digit growth “significantly” in 2021. It also plans to expand its fledgling networks business in North America and Japan, after winning a 7.9 trillion won contract to supply 5G wireless solutions to Verizon Communications Inc. during the third quarter.The company further delayed the announcement of a new shareholder return policy, telling analysts Thursday it now plans to release details in late January.The death of Samsung Group Chairman Lee Kun-hee over the weekend may add to uncertainty. While his son Jay Y. Lee is expected to take over as chairman of the group, the younger Lee still faces two trials over allegations he used bribery and accounting trickery to smooth his path to succession. The family will also have to pay billions of dollars in inheritance tax, and Samsung has so far declined to comment on how they will fund the payments.Read more: Lee’s Risk of Jail Time Complicates Samsung Succession Plans(Updates with analyst comment in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Earlier this year, as the pandemic wreaked havoc on the economy, Facebook Inc., Alphabet Inc.’s Google and other big players in digital-advertising were bracing for a prolonged slump in the industry. It’s clear now that many of their worst fears haven’t come to pass. Marketers began spending again after governments relaxed lockdown orders and economies stabilized. But with elevated valuations already baking in expectations for a rebound and a surge in Covid-19 cases now threatening to stunt the recovery, investors might want to take a moment to stop and assess. We will get a clearer picture of the online ad market’s condition later this week when Facebook, Alphabet and Twitter Inc. report results after the close of trading on Thursday. But let’s look at what we’ve learned so far from other companies this earnings season.Anecdotal evidence from earnings calls points to an improved economic environment, at least until lately. Verizon Communications Inc. CEO Hans Vestberg said last week he saw high levels of business activity among the wireless carrier’s large corporate customers. In addition, two major semiconductor suppliers — Texas Instruments Inc. and Xilinx Inc. — cited stronger-than-expected demand from the auto sector in their calls with investors. This all bodes well for ad spending, assuming the brighter outlook is sustained. Snap Inc.’s blockbuster earnings last week provided perhaps the strongest evidence of a rebound. The social media company beat the consensus sales estimate for its September quarter by more than 20%, with management saying many of the headwinds they expected didn’t materialize. Corporate advertisers surprisingly resumed brand-oriented marketing initiatives, a very positive sign. But Snap’s impressive performance also reflects the success of unique advertising products that have helped set it apart from its peers. These include new ad formats that can directly lead users to online sales and app downloads, as well as augmented-reality offerings that enable users to virtually try out products inside the Snapchat app. Larger rivals haven’t been able to match this type of innovation and likely won’t turn in the same kind of outperformance, even if they exceed expectations. Out of Big Tech, Facebook has done the best in expanding its offerings into the right areas. Recently, the social media giant has been aggressively moving into the e-commerce space. In May, the company signed a partnership with Shopify Inc. to expand its Facebook Shops initiative, enabling small businesses to easily create online stores on both Facebook and Instagram. Last week, it also announced plans to charge for new commerce-related services for businesses inside WhatsApp. This is a big deal because it represents Facebook’s first concrete step to monetize this messaging platform, which has more than two billion users. With consumer shopping behavior permanently shifting online, these moves should pay off.Google and Twitter have been less innovative, and it may show in their results. A healthier advertising market will help Google’s search ad revenue and Twitter’s more brand-oriented ads, but the two companies haven’t offered anything dramatically new or different that could spur another leg higher on growth. In some ways, Google’s search dominance may have left it with fewer additional areas to conquer. And I’ve repeatedly written about Twitter’s lackluster track record in keeping up and matching the competition’s latest ad platform technologies and features. Despite Twitter’s stock recent rise, I have seen nothing to change that assessment.Where does this leave investors heading into earnings? The news may well be positive — the ad business does seem to have held up better than expected — but the industry’s higher valuations depend on continued business momentum. New Covid-19 outbreaks, unknowns surrounding the presidential election and a lack of fresh fiscal stimulus all cloud the view, not to mention a toughening regulatory landscape. Even with its strong results, Snap declined to give official fourth-quarter guidance, citing the uncertainty over the holiday season and the continuing pandemic. If business trends do worsen, it may be a larger issue for Google and Twitter. Facebook and Snap should be more insulated, with their latest services and tools allowing them to keep riding the tailwind of e-commerce. Either way, the big wins may be harder and harder to score.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The streaming service has already surpassed even the wildest expectations for its success. This could be just the beginning.