Samsung Electronic’s earnings are heading in the right direction for the first time in nearly two years thanks to its semiconductor and display businesses.
The South Korean company posted quarterly revenue of 51.68 trillion Korean won, or $45 billion. up 8.9% year-over-year. Profits came in slightly above its earlier estimate, at 7.39 trillion won, or $6.45 billion, up a dramatic 82%.
Samsung’s semiconductor business makes chips for some of its biggest competitors including Apple (AAPL). Most recently, Samsung split the contract for Apple’s A9 chip processor, used in the iPhone 6S and 6S Plus, with Taiwan Semiconductor Manufacturing Company.
Boosted by the success of its competitors, Samsung’s chip business was responsible for nearly half — 3.66 trillion won, or $3.2 billion — of the company’s profit for the three months ending Sept. 30.
Display panels also contributed to the strong quarter, accounting for 930 billion won, or $812 million, of profit on revenue of 7.49 trillion won, or$6.5 billion.
Smartphone revenue increased, but profits were down when compared with the previous quarter following a price cut the company made in July to two of its flagship smartphones, the Galaxy and S6 Edge. The company lowered the prices to remain competitive as the global smartphone market continued to become more saturated. It also followed disappointing sales during the second-quarter, compounded by the company’s inability to keep up with demand.
Samsung’s latest smartphones, the Galaxy Note 5 and S6 Edge+ are “are expected to exceed in shipments reached by their predecessors” according to the earnings announcement. But the statement seemed to shed little light on Galaxy S6 Edge+ sales, as it’s a first generation device lacking historical sales data for comparison.
Earlier Wednesday, research firm IDC released its latest smartphone shipment report. According to the report, Samsung shipped 84.5 million smartphones in the third-quarter, an increase of 6.4 million units when compared to the same quarter last year.
Samsung expects its fourth quarter smartphone sales to grow modestly amid competition from the likes of Apple and Huawei on the high- and low-end, respectively.
The earnings bump will be short-lived, however, because Samsung forecast earnings to decline in the fourth-quarter due to an unfavorable foreign exchange rate.
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