Samsung Profit Up 52%, S9 & Memory Chip Sales Strong
Samsung has continued its streak of bumper earnings, posting a 52% YoY increase in 1Q18 net profit [11.69 trillion won/US$10.8 billion], driven by strong memory chip sales, and the release of its S9/S9+ smartphone.
In line with analyst expectations, operating profit notched 15.64 trillion won – the sixth consecutive quarter of record results.
For the three months to March 31st, sales jumped 20% to 60.6 trillion won.
Samsung affirms its semiconductor business saw strong chip demand, specifically from global data centre operators for graphic and cryptocurrency mining cards.
Amidst speculation the memory chip market has peaked, Samsung’s semiconductor business notched 11.55 trillion won in operating profit.
By contrast, the company’s display division notched 410 billion operating profit, stemming from falling LCD prices and lower than expected sales of Apple’s iPhone X.
Despite their market rivalry, Samsung is one of Apple’s largest OLED suppliers.Concerning second quarter outlook, Samsung expects its semiconductor business to remain strong, however, warns falling display panel prices and weakening profits from its mobile phone business may hamper overall earnings growth.
The company forecasts rising competition in the “high-end” mobile phone market in the coming months.
Samsung’s TV business is forecast to deliver year-on-year growth in the second quarter.
The company expects to “solidify” the presence of its premium TV range, following the launch of its 8K and Micro LED TVs in the second-half.
Samsung’s ‘Digital Appliances Business’ notched “moderate growth” in 1QY18, driven by sales of its FlexWash washing machine, Cube air purifier and air conditioners.
The company aims to accelerate the growth of its premium appliance lineup, specifically its QuickDrive washing machine and POWERStick PRO vacuum cleaner.
The Korean giant remains “positive” about its second-half outlook, forecasting “strong demand” for DRAM and “increased sales of OLED panels”.
Beating analysts’ expectations, Samsung’s mobile business achieved 3.77 trillion won operating profit, coupled with stronger than expected sales of its latest flagship smartphone, the S9/S9+.
Following their launch in late February, analysts’ predict Samsung has shipped over 10 million S9/S9+ units.
For the rest of the year, Samsung expects to further increase B2B sales of its built-in appliances and system air conditioners, whilst “expanding its online business”.
Samsung’s 1Q earnings announcement is available to read here.