Samsung Electronics said Thursday its profit for the three months that ended in September likely rose 58% from a year ago.

Operating profit for the quarter likely came in at 12.3 trillion Korean won (about $10.6 billion) up from 7.78 trillion won a year ago, Samsung said in its earnings guidance. That was higher than the 10.5 trillion analysts predicted for the September quarter, according to Refinitiv SmartEstimate.

Consolidated sales were approximately 66 trillion won for the quarter, up about 6.5% from 62 trillion won a year ago.

Samsung shares traded down 0.33% Thursday afternoon, trailing South Korea’s benchmark index which was up 0.16%.

Smartphone boost

Though the company did not provide a breakdown on how each business unit performed, analysts said that the September quarter results were driven by an uptick in smartphone sales, and higher overall memory-related earnings.

“I think a large part of it seems to be smartphone units were up a lot. We did have a chance to talk to the company briefly this morning and seems like the smartphone units have been very, very strong in Q3,” Mark Newman, managing director and senior analyst at Bernstein, said on CNBC’s “Street Signs Asia” on Thursday. Newman explained there was a rebound in demand for Samsung’s flagship smartphone models including the Galaxy Note 20 and preliminary sales of its new foldable phone appeared to also be doing well.

Apart from the mobile division, consumer electronics and home appliance businesses likely contributed to Samsung’s strong earnings for the third quarter, according to SK Kim, executive director at Daiwa Securities. He explained Thursday on CNBC’s “Squawk Box Asia” that an improvement in Samsung’s cost structure, a shift to online marketing platforms in light of the coronavirus pandemic and pent-up demand helped bolster the company’s earnings.

Low memory chip prices due to an oversupply in the market likely affected Samsung’s main profit-making semiconductor business. A report this week from semiconductor researcher TrendForce said average selling price for memory chips is expected to remain weak in the fourth quarter of 2020 and decrease by about 10% on a quarterly basis. That was despite many smartphone brands stocking up memory products in light of U.S. sanctions on Huawei, the report said.

Benefiting from Huawei’s problems

Samsung is seen as a big beneficiary of both Huawei’s problems as well as Intel’s, according to Newman. U.S. sanctions on Huawei severely limit the Chinese tech company’s options to acquire chips for its smartphones and critical semiconductor components. For its part, Intel announced a delay in its next-generation chips during its earnings guidance in July.

“That’s why it had this outperformance versus other memory stocks,” he said.

Newman also explained that Samsung’s networking equipment business is also doing well, gaining market share from Huawei in 5G equipment sales. Last month, the South Korean tech giant said it had won a $6.6 billion contract to supply Verizon with network equipment.

If Huawei runs out of memory chips to make its own smartphones, then Samsung is likely to recoup more market share away from the Chinese vendor outside China, according to Newman. That’s because both Samsung and Huawei smartphones run on Google’s Android operating system, which means users are likely to opt for another Android-based brand instead of switching over to Apple.

“So I think smartphones, telecom equipment and a bit of semiconductor are the main reasons for the beat,” he added.

Daiwa’s Kim told CNBC there is also upside in demand for Samsung’s mobile chips while the display unit is set to receive a boost in the fourth quarter from a new iPhone launch — Samsung is a supplier of the high-end display screens used in iPhones.

Samsung posted an almost 23% jump in operating profit to 8.1 trillion Korean won (almost $7 billion) in the three months between April to June.

Full results for the September quarter are due later this month.