Home Uncategorized Samsung Electronics says first-quarter profit likely rose 44%, matching expectations By Reuters

Samsung Electronics says first-quarter profit likely rose 44%, matching expectations By Reuters

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© Reuters. The logo of Samsung Electronics is seen at its store in Seoul

By Joyce Lee and Heekyong Yang

SEOUL (Reuters) – Samsung Electronics (OTC:) Co Ltd on Wednesday said first-quarter profit likely rose 44%, with analysts attributing the surge to brisk sales of smartphones and TVs, albeit tempered by a likely fall in chip earnings after a storm halted U.S. output.

The South Korean technology giant forecast January-March operating profit of 9.3 trillion won ($8.32 billion), matching a weighted average analyst forecast from Refinitiv SmartEstimate.

Revenue likely rose 17% from the same period a year prior to 65 trillion won, the firm said in a preliminary earnings release without offering any breakdown of the figures.

Samsung (KS:) is due to release detailed earnings later this month.

Samsung’s share price traded down 0.4% after the release versus a 0.2% rise in the benchmark . The stock has risen about 6.2% so far this year versus the KOSPI’s 8.8%.

Analysts said Samsung’s mobile division likely saw operating profit soar more than 1 trillion won to about 4.15 trillion won after its flagship Galaxy S21 smartphone series outsold the previous version by a two-to-one margin in the six weeks since its January launch, according to research provider Counterpoint.

A lower starting price for the flagship helped sales for the world’s largest smartphone maker during the quarter, with the S21 priced $200 lower than the S20, Counterpoint said.

In its chip division, analysts said profit likely fell 20% to 3.6 trillion won due to the cost of ramping up domestic production as well as losses at its Texas plant following a mid-February stoppage, blunting the benefits of strong demand.

U.S. memory chip peer Micron Technology Inc (NASDAQ:) last month forecast third-quarter revenue above analyst estimates due to rising demand brought about by a global shift to remote work.

The price of DRAM chips widely used in laptops and other computing devices rose 5.3% in January-March from the previous three months, showed data from TrendForce. Analysts expect that trend to continue as a global chip shortage spurs on buyers to snap up supplies.

“Prices are likely to rise further in the current quarter due to solid demand for servers,” said analyst Park Sung-soon at Cape Investment & Securities.

Profit in Samsung’s television set and home appliance business likely more than doubled to around 1 trillion won, analysts said, also due to continued stay-at-home demand.

($1 = 1,118.2100 won)

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