Samsung Profits Soar But TV Sales Set To Fall
Samsung Electronics has boosted net profits 46% as demand for their TV’s, appliances and smartphones soar also contributing was demand for processors.
But despite this the Company is tipping weaker demand for TV’s this year as consumers go back to work.
The big South Korean Company who got back their #1 slot in the smartphone market reported a net profit of US $6.4 billion, up from 4.88 trillion won the prior year. Revenue rose 18% to 65.4 trillion won for the three months ended March 31.
Strength in Samsung’s mobile and consumer-electronics business saw operating profits for Samsung’s mobile division soared by 65%, to 4.39 trillion.
he results were aided by an earlier release of its Galaxy S21 flagship phone, which made its debut roughly a month ahead of its usual timetable. It was the first time in nearly five years that the firm’s mobile-unit operating profits topped those of semiconductors due in part to growth in China.
It was also helped by a weakening of some key rivals. China’s Huawei Technologies has been hit by sanctions, while LG Electronics recently declared its exit from the mobile-phone industry.
The Companies consumer-electronics operating profits more than doubled to 1.12 trillion won. But the company warned that demand for TVs could fall in the latter half of the year, as more countries reach herd immunity and shift from home entertainment to outdoor activities.
Samsung has forecast a significant improvement in semiconductor profits in the current quarter due to the global chip shortage, Samsung said demand for its semiconductors will remain strong as global economies rebound.
The Company is also set to benefit from tipped price rises for the two major kinds of memory chips, of which Samsung is the No. 1 producer.
Prices for NAND flash, which fell in the opening months of the year, should rise, while prices for DRAM, which give devices multitasking power, should grow 15% to 20%, said Sanjeev Rana, a senior analyst at CLSA, a Seoul-based brokerage.
As an electronics manufacturer, Samsung said component shortages have forced discussions with retailers and other large buyers to determine which gadgets and appliances the South Korean manufacturer should be prioritizing.
“We are currently rebalancing our overall production,” said Ben Suh, an executive vice president for investor relations, on the earnings call.
Samsung’s leader, Lee Jae-yong, remains behind bars after receiving a 30-month prison sentence in a retrial of his 2017 conviction for bribing a former South Korean president. His prior time in prison of roughly a year counted toward his new sentence, meaning he could be released in July 2022.
On Wednesday, Mr. Lee and his family outlined plans to pay a more than $10 billion inheritance-tax bill, which it plans to do over multiple instalments over the next five years. Samsung didn’t offer much detail on how precisely the Lee family would come up with the funds. Corporate-governance experts say the family is likely to rely on dividends from their Samsung holdings, while securing a loan backed by their company shares.