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Samsung expects first-quarter profits to rise 44%: analysts

Avatar Written by Hamza Zakir · 1 min read>

Samsung 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 US output.

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

According to Reuters, 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.

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

Cross-town TV and home appliance rival LG Electronics on Wednesday announced its largest-ever preliminary quarterly operating profit of 1.5 trillion won for January-March.

In Samsung’s 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.

US memory chip peer Micron Technology Inc 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.

Written by Hamza Zakir
Platonist. Humanist. Unusually edgy sometimes. Profile