Samsung First-quarter Beats Estimates; Chips Likely to Prop up Virus-hit Second Quarter
Samsung Electronics Co Ltd. said on Tuesday its first-quarter operating profit likely managed to rise slightly from a slump a year earlier, as solid chip sales helped cushion the blow from the coronavirus pandemic on smartphones and TVs.
The global leader in semiconductors is benefiting from higher demand for chips from laptop makers and data centres amid the coronavirus-driven shift to working from home, even as its mobile and consumer electronics businesses suffer.
Samsung said operating profit was expected to be 6.4 trillion won ($5.2 billion) in the quarter ended March, compared with 6.2 trillion won a year ago and the 6.2 trillion won estimate from analysts according to Refinitiv SmartEstimate.
Revenue likely rose 5% to 55 trillion won from a year ago, in line with the 55.6 trillion won estimate.
Samsung Electronics shares were 2.3% higher while the broader market as up 1.9%.
The maker of smartphones, TVs, appliances, memory chips and displays is the first global tech company to report its January-to-March quarter earnings estimates.
Samsung Electronics said last month the coronavirus would hurt sales of smartphones - which accounted for about 47% of its revenue last year - and consumer electronics in 2020, while demand from data centres would fuel a recovery in memory chip markets.
When the coronavirus outbreak started in China last year, Samsung’s strategy of spreading its production base to countries including Vietnam and India seemed to pay off as supply disruptions in China hit rivals such as Apple.
But as the virus spread across the globe, Samsung too has had to close factories and retail stores in Europe, India and the United States.
NH Investment & Securities said on Tuesday it expected sales of Samsung’s premium Galaxy 20 smartphone to reach 20 million units this year, far short of the 32 million it had forecast earlier.
LG Electronics, Samsung’s crosstown rival in TVs, phones and appliances, meanwhile said its first-quarter operating profit likely rose 21% to 1 trillion won. Analysts expect the coronavirus to affect LG this quarter.
Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.