Samsung Electronics' is expected to make another earnings surprise in the third quarter. After overcoming the COVID-19 shock and earning more than eight trillion won in operating profit in the second quarter, the Korean tech giant is expected to surpass nine trillion won in operating profit in the third quarter, some analysts predict.

Industry insiders expect that the company’s Consumer Electronics (CE) Division will rebound while the IT and Mobile (IM) Division will make a turnaround with the release of new products such as the Galaxy Note 20 series.

Securities firms expected Samsung Electronics to reach 9.5245 trillion won in operating profit in the third quarter on a consolidated basis, financial information provider FnGuide said on July 8. The figure is a year-on-year increase of 22.5 percent and a quarter-on-quarter rise of 17.6 percent. Its sales are expected to decrease 1.5 percent on year to 61,052.9 billion won.

On July 7, Samsung Electronics announced that its second-quarter operating profit was estimated at 8.1 trillion won, up 22.7 percent from a year earlier. Analysts predicted that the company’s operating profit would fall 1.9 percent from the same period of 2019 to 6,470.3 billion won in the aftermath of the COVID-19 crisis.

Industry watchers expect that sales of smartphones and home appliances, which were somewhat sluggish in the third quarter, will recover, driving the company’s top-line growth. Demand for household appliances such as large TVs is expected to rise as an untact culture has become a daily routine. On top of that, sales of air conditioners have been on the rise due to a recent strong heat wave. The market for sanitary appliances is also growing due to the spread of COVID 19.

The IM Division's performance in the third quarter is expected to improve compared to the second quarter as it is set to release its strategic smartphone Galaxy Note 20 and the foldable phone Galaxy Fold 2 in August. "In the IM sector, sales of smartphones are expected to grow more than 20 percent from the previous quarter," said a researcher at Hanwha Investment & Securities.

In the display sector, Apple, the biggest customer, is expected to increase its purchase of active-matrix organic light-emitting diode (AM OLED) panels for production of new smartphone models, helping Samsung Electronics improve earnings. "As shipments of AM OLED panels are expected to increase 70 percent compared to the second half of 2019, Samsung Electronics is expected to improve its performance in the display sector," said an analyst at Hi Investment & Securities.

On the other hand, its semiconductor business, which played a major role in the second quarter, is likely to slow down as demand for semiconductors will be reduced in the third quarter. Server companies are predicted to manage their inventories in the second half of 2020 and reduce semiconductor purchases.