Samsung expects record profits in third quarter

Electronics giant expects to record an operating profit of $15.8 billion, a 20 percent increase year over year.

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Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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Samsung is still snagging record profits, despite slowdown in smartphone sales.

Sarah Tew/CNET

Samsung really appears to be cashing in chips.

The South Korea electronics giant said Thursday it expects to record its biggest operating profit ever in the third quarter, likely thanks largely to continued strong demand for its memory chips. The company said its operating profit will come in at around 17.5 trillion won ($15.8 billion), a 20 percent increase from the year-ago period.

The company is also expected to record revenue of 65 trillion won ($57.3 billion), an increase of nearly 5 percent from a year earlier. The guidance, released Thursday ahead of full earnings later this month, didn't provide specific divisional results.

Samsung is best known as the world's biggest phone and TV maker, but it also sells more memory chips than any other company on the planet. Last year, Samsung became the world's biggest semiconductor maker in terms of revenue, beating out the long-term leader Intel.

In a lackluster second quarter, Samsung's memory business recorded a 33 percent increase in revenue, while the company's mobile division saw a decline in revenue of 22 percent, still hurting from a slowdown in demand for its newest phones .

Samsung's flagship Galaxy S9 and S9 Plus hit the market on March 16 with better cameras and improved audio, but they didn't quite fly off the shelves. In the second quarter -- the first full period of Galaxy S9 sales -- Samsung actually lost more market share than any other major handset maker and posted its worst performance since the second quarter of 2013.

The company also warned last quarter that "market condition will likely remain challenging in the second half amid pricing competition and new product launches."

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