Samsung Electronics Co. on Thursday projected hiatus in its hot sale streak from softened global demand on prospects of inflation-accompanied recession as its top and bottom line eased around 1 percent in the second quarter from earlier three-month period.

The South Korean tech giant in its earnings guidance estimated its consolidated operating income at 14 trillion won ($10.7 billion) for the second quarter, up 11.38 percent on year but down 0.85 percent on quarter. Sales were estimated at 77 trillion won, up 20.94 percent on year but off 1 percent on quarter.

Sales stayed robust, close to its best-ever quarterly record of 77.78 trillion won in the first quarter and was in line with expectations. The company had kept up record sale streak until the first quarter.

Operating profit was slightly below the market consensus of 14.7 trillion won. Earnings would have benefited from favorable exchange rate as the Korean won had been at its weakest since the global financial crisis in 2009.

Shares of Samsung Electronics were trading 2.84 percent higher at 58,000 won Thursday morning.

Chip sales are projected to have earned 10 trillion won in operating income on increased investment in data centers.

The company releases final and detailed earnings for chips, smartphones, and home appliances later this month.

The U.S. dollar averaged 1,260 won in the second quarter, up 12 percent on year and 5 percent on quarter. Samsung Electronics estimates a 1.8 percent gain in the U.S. dollar versus the Korean won aids about 300 billion won in operating income, which would suggest the company benefited about 830 billion won from cheaper won.

Chips are sold in dollars, and strong greenback would raise earnings converted to the Korean won.

Despite favorable exchange rate continuing onwards, the company expects deterioration in second-half performance on uncertainties on global demand due to foggy economic outlook from strong prices and interest rates.

The price of mainstay memory chips has been on a downward spiral. Taiwanese market researcher TrendForce projected DRAM price to fall up to 10 percent in the third quarter from the previous quarter. NAND flash price has also been softening.

Samsung Electronics raises hope in the new smartphone releases in the third quarter – foldable Galaxy Z Fold 4 and Flip 4. It also anticipates growth in foundry on improving yield and mass production from 3-nanometer process.

Analysts still expect Samsung Electronics can report best annual earnings, with operating income topping 60 trillion won for the first time to beat 58.9 trillion won in 2018.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]