SEOUL--Samsung Electronics Co. expects third-quarter operating profit will be its highest ever, topping analyst estimates as demand for its electronic components remains high.

The world’s largest smartphone and semiconductor maker Friday said it expected an operating profit of 17.5 trillion South Korean won ($15.4 billion) for the quarter, up 20% from 14.53 trillion won a year earlier. Samsung expects revenue will increase to 65 trillion won from 62 trillion won.

Analysts polled by S&P Global Market Intelligence had expected the company to post operating profit of 17.1 trillion won and revenue of 65.1 trillion won for the quarter ended Sept. 30. Samsung reports final results later this month.

The company’s prior record operating profit is 15.64 trillion won, set during the first three months of the year.

But investors are concerned how long Samsung can cash in on memory chips and whether the firm’s recent slide in smartphone sales will reverse itself. Samsung Electronics shares are down 22% since last November, when memory demand and handset growth looked more certain.


Analysts are expecting weaker-than-expected shipments for Samsung’s flagship devices, the Galaxy S9 and the Galaxy Note 9, which hit shelves in August. In its second quarter, Samsung’s mobile-unit operating profits nose-dived by one-third from a year earlier. Executives have said they were too cautious adopting aggressive new features.

Samsung is battling handset rivals on two fronts. It is still competing with Apple Inc.’s iPhone for the world’s wealthiest consumers over high-end devices priced at $1,000 or more. But it’s also engaged in a battle for inexpensive phones with Chinese rivals who are offering similar features at lower prices, challenging the South Korean firm’s dominance in markets like India.

Samsung’s smartphone shipments plummeted to 71.5 million units for the quarter ended in June, a 10% drop from the prior year, according to Strategy Analytics, a market researcher. Keeping volumes high is essential for Samsung, as it gives the company negotiating power to keep component prices low with suppliers -- even more critical now that smartphone growth is tapering off as consumers hold onto their handsets longer.

The Suwon, South Korea-based company has leaned on memory chips to offset mobile losses. But memory prices “are tracking worse than expected,” said Susquehanna analyst Mehdi Hosseini, in a research note last month, where he lowered Samsung Electronics’ target price.


Prices for flash NAND memory, which is used to store content on devices, are projected to fall 10% to 15% during the final six months of 2018 from the previous quarters, Mr. Hosseini said. Prices for DRAM, a chip that gives devices multi-tasking speed, are expected to decline 3% to 5% in the final three months of 2018, versus the previous quarter, while the first half of 2019 could see double-digit drops, he added. Samsung is the largest maker of NAND and DRAM.

Memory prices would still be at historically high levels. But Mr. Hosseini doesn’t expect stabilization of Samsung’s memory business until the middle of 2019.

Write to Timothy W. Martin at timothy.martin@wsj.com