Samsung Beats Coronavirus Downturn While LG Wobbles
Samsung Electronics whose health is crucial to South Korea’s economy has reported a 2.7% increase in profits and a 5% increase in sales despite the outbreak of a Coronavirus epidemic.
The good results reveal that Samsung dodged any major impact from the Covid-19 pandemic however executives expect that to change during the next quarter.
Locally analysts are bullish that Australia could come out of the crisis in better shape than several other Countries.
Samsung’s revenue growth was the strongest in six quarters, though 5% is on the low side for Samsung.
And while it was in line with estimates, analysts had been trimming expectations over the past few months.
Samsung shares climbed more than 3% after it posted an operating profit of 6.4 trillion won ($5.2 billion) in the March quarter, surpassing the average analyst estimate by 3.6%.
Sales rose 5% to 55 trillion won.
The company didn’t provide net income or break out divisional performance, which it will do later this month when it releases final numbers.
In comparison archrival LG Electronics reported ‘tentative’ consolidated revenues of KRW 14.7 trillion in the first quarter of 2020 with an operating profit of KRW 1.1 trillion.
LG said that sales are expected to be 1.2 percent lower than the same quarter last year with operating income increasing 21.1 percent year-on-year.
The Company took the same approach as Samsung claiming that details regarding each division which will be announced officially later this month.
The closedown of businesses around the world is set to be a tough road ahead for the two South Korean firms with the world economy forecast to shrink because of the coronavirus pandemic, triggering layoffs and dampening consumer demand.
The global economy is expected to contract 1.9 percent this year, according to Fitch Ratings, with steeper negative growth of 3.3 percent seen in the United States.
Global smartphone sales dropped 14 percent in February year-on-year, with China seeing a nearly 40 percent decrease, according to Hong Kong-based market researcher Counterpoint.
When compared to the October-December period of last year, Samsung’s operating profit plunged 10.6 percent, illustrating how far the novel coronavirus has affected its business around the world.
The firm’s share price reached a record high in January but has since fallen nearly 20 percent amid concerns over the coronavirus pandemic and its economic repercussions.