Samsung Electronics posted Friday a surprise record operating profit for the first quarter of the year, beating market expectations. A continued boom in demand for memory chips and the early launch of its premium Galaxy S9 smartphone likely offset the slowdown in its other business areas, analysts said.
The South Korean tech giant on Friday estimated revenue and operating profit for the first quarter at 60 trillion won and at 15.6 trillion won, respectively. Its operating profit jumped 57.6 percent from a year earlier, up 3 percent from the previous quarter when the company posted a record profit of 15.15 trillion won. The figure is seen as earnings surprise, beating an average forecast of 14.56 trillion won from a survey of analysts.
Revenue for the quarter was estimated at 60 trillion won, slightly down from 65.98 trillion year-on-year but an increase of 18.7 percent compared to the same period last year. Samsung has seen its revenue surpassing 60 trillion won for four consecutive quarters. The ratio of operating profit to revenue leaped to 26 percent in the first quarter, reaching an all-time high, from last year’s figure at 19.6 percent.
It was the semiconductor business that led to the company’s record-breaking earnings. Preliminary figures for each business division have not announced yet, but industry watchers estimate operating profit of the company’s semiconductor division at around 11 trillion won. In addition, its IT mobile division is likely to report better-than-expected performance on the back of the favorable market reception of the S9, which was released in mid-March, as well as the robust sales of previous models such as the Galaxy Note 8.
“The strong demand in the global chip market is expected to continue through the second quarter, but it remains to be seen whether the sales of the Galaxy S9 will gain momentum,” said a senior official at Samsung Electronics.
Ji-Hyun Kim email@example.com