Samsung Electronics beats estimates in the first quarter

Home > Business > Industry

print dictionary print

Samsung Electronics beats estimates in the first quarter

Customers test Samsung's Galaxy S21 smartphones on Jan. 15 in Seocho-dong, southern Seoul. [News1]

Customers test Samsung's Galaxy S21 smartphones on Jan. 15 in Seocho-dong, southern Seoul. [News1]

 
Samsung Electronics expects a first-quarter operating profit of 9.3 trillion won ($8.3 billion) as strong smartphone and consumer electronics sales balanced weaker chip performance.
 
The figure, which is up 44.19 percent on year and 2.76 percent on quarter and was released in an earnings guidance announcement Wednesday, beat FnGuide's market consensus of 8.9 trillion won, despite a major shutdown at a chip plant in Austin, Texas.
 
Sales in the first quarter were forecast by Samsung Electronics to be 65 trillion won, up 17.48 percent on year and 5.61 percent on quarter and also higher than forecasts.
 
Neither net profit nor segmentation were provided.
 
The base effect helped, as sales and profit were starting to get hit in the first quarter of last year as the pandemic took hold in Korea.  
 
Mobile phone sales probably drove the strong results, as the Galaxy S21 was introduced in January — a month earlier than expected — and the company's budget A-series phones are being heavily promoted.  
 
Several analysts predict that the company's smartphone and network equipment division brought in over 4 trillion won of operating profit in the January-to-March period, while the chip business is set for an operating profit in the 3-trillion-won range.
 
First quarter operating profit in the consumer electronics division is estimated to be 1 trillion won, and 400 billion won of operating profit is anticipated in the display business, according to the analysts.
 
"Smartphone and consumer electronics businesses led the improvement in profit," said Doh Hyun-woo, an analyst at NH Investment & Securities. "Sales of Galaxy S21 are estimated to be 11 million units globally due in part to competitive pricing. Televisions and other consumer electronics items got a boost from pandemic-induced demand."
 
Doh forecasts smartphone operating profit to be 4.3 trillion won and semiconductor operating profit to be 3.5 trillion won.  
 
The early release of the S21 helped Samsung reclaim the top spot in global smartphone sales in February, with a 23.1 percent share, according to market tracker Strategy Analytics.    
 
The semiconductor division recorded 3.86 trillion won in operating profit in the final quarter of last year and mobile communications registered 2.42 trillion won.  
 
If the estimates hold, a long running trend in which chips made more than phones will have been broken. Since the second quarter of 2016, semiconductors have brought in more profit than devices.
 
In the first quarter, the prices of memory chips climbed, but Samsung faced an unexpected loss associated with the temporary closing of the Austin plant due to freezing weather.  
 
"The semiconductor business is expected to generate 3.7 trillion won in operating profit with the uptick in memory-chip prices," said Kim Sun-woo, an analyst at Meritz Securities, who lowered his estimate of chip profits by 200 billion won due to the shutdown.
 
Kim estimates 4.4 trillion won of operating profit from smartphones.
 
In Wednesday trading, Samsung Electronics lost 0,47 percent to 85,600 won.  
 
BY PARK EUN-JEE   [park.eunjee@joongang.co.kr]
 
 
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now