A number of top brokerages on Monday cut their third-quarter earnings forecasts for Samsung Electronics and LG Electronics, but expected both to make a strong comeback in the fourth quarter on improved smart device sales and rising chip demand.

Samsung Securities lowered its forecast for Samsung’s third-quarter net profit to 9.8 trillion won ($9 billion) from 10.2 trillion won, while Kyobo Securities also expected a quarterly profit of around 9.8 trillion won.

“Sales of consumer electronics are likely to be halved to around 1.3 trillion won from 2.4 trillion won for Samsung, mainly due to a sluggish global economy coupled with the rising exchange rates in emerging nations,” said Hwang Min-sung, an analyst at Samsung Securities.

Rate changes in countries such as Vietnam and India can have an impact on local conglomerates, which usually operate production facilities in those regions.

Choi Do-yeon of Kyobo said, “Sales are expected to reach 58.7 trillion won, up 2.1 percent from the second quarter, and net profit at 9.8 trillion won, which reflects a 3.3 percent on-quarter increase but falls below the market consensus,” adding that a slow European TV market and fluctuating exchange rates were behind the slower third-quarter performance.

But brokerages expected the fourth quarter to be more prosperous for Samsung as DRAM prices rise in the aftermath of a fire at SK Hynix, the world’s No. 2 memory chipmaker.

Smartphone shipments also were likely to remain at 85 million units for the third quarter, which was above the previously set target of 80 million, the analysts said.

Citing this string of positive factors, Woori Securities forecast Samsung to reach 10 trillion won in net profit for the third quarter.

The story for LG Electronics was similar, with Shinhan Securities saying that while LG appeared to be making a breakthrough in the markets of Central and South America where the firm is in second place in smartphones, it still has to cope with high marketing costs and negative seasonal factors.

Shinhan consequently expected third-quarter net profit to fall to around 319 billion won, which is below the market consensus of 328 billion won.

But as LG proved the consensus wrong in the second quarter, experts appeared to have pinned high hopes on the world’s second-largest TV maker. 

In the fourth quarter, LG, like Samsung, was expected to see a 19 percent on-quarter growth in net profit as sales of the G2 pick up following its global launch this month.

By Kim Ji-hyun (jemmie@heraldcorp.com)