Samsung first-quarter profit likely surged 45% on bumper smartphone, appliance sales - Fox Business

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SEOUL - Samsung Electronics Co Ltd likely saw a 45% jump in profit for January-March on robust sales of smartphones, TVs and home appliances, though chip division earnings are seen tumbling after a storm suspended production at its U.S. plant.

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Spending more time at home due to the coronavirus pandemic, consumers have splashed out on an array of high-margin consumer electronics which in turn has helped cause a global shortage of semiconductors.

Operating profit for the South Korean tech giant in the quarter is expected to have climbed to 9.3 trillion won ($8.2 billion), according to a Refinitiv SmartEstimate drawn from 16 analysts. SmartEstimates assign more weight to forecasts from consistently accurate analysts.

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That would mark Samsung’s highest operating income level for the first quarter since 2018. Revenue likely rose 12%.

Samsung is scheduled to announce preliminary first-quarter results on Wednesday.

Samsung Electronics Co Ltd likely saw a 45% jump in profit for January-March on robust sales of smartphones, TVs and home appliances, though chip division earnings are seen tumbling after a storm suspended production at its U.S. plant. (iStock)

In particular, its mobile division looks like it had a stand-out quarter, benefiting from the launch of its Galaxy S21 series in mid-January - more than a month ahead of the flagship model’s usual annual release schedule.

The world’s largest smartphone maker is estimated to have cornered roughly 23% of global market in the quarter, thanks to that launch and cheaper-than-usual pricing for its premium devices, according to Counterpoint Research. The S21, for example, was priced $200 lower than the S20.

That compares with 20% market share in the same quarter a year ago and 16% market share in the previous quarter when arch-rival Apple Inc released the iPhone 12.

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High-margin accessories such as Galaxy Buds did brisk business as well, analysts said. They estimate operating profit for the division likely soared by more than 1 trillion won from a year earlier to about 4.15 trillion won.

Samsung’s TV and home appliance business is expected to see operating profit more than double to around 1 trillion won.

Despite stratospheric demand worldwide for chips, profits for Samsung’s semiconductor division are expected to have fallen by roughly a fifth to 3.6 trillion won.

The division has been hampered by the cost of ramping up new production and losses at its Texas factory after a winter storm halted output in mid-February. Samsung said production at the plant had returned to near-normal levels as of late March.

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Analysts have estimated the losses related to the Texas factory shutdown at around 300-400 billion won.

April 05, 2021 at 09:25AM
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Samsung first-quarter profit likely surged 45% on bumper smartphone, appliance sales - Fox Business

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