Samsung’s first-quarter profit rises 44% on higher smartphone sales
South Korean company benefits from pent-up demand for consumer products as remote working fuels need for more personal devices
Samsung Electronics said its first-quarter operating profit rose by 44 per cent from a year ago, driven by strong smartphone and home appliance sales despite a shortage of semiconductor chips worldwide.
The world's biggest smartphone and memory chip maker reported an operating income of 9.3 trillion Korean won ($8.3 billion) in the three months through to March 31, according to the company’s preliminary results released on Tuesday.
It was up by about 2.8 per cent over the fourth quarter of last year.
The results – the company's highest first-quarter operating profit since 2018 – matched the average analyst forecast by Refinitiv SmartEstimate.
First-quarter revenue rose by 17.5 per cent from a year ago to 65tn won. It increased about 6 per cent from the previous quarter, which recorded sales worth 61.5tn won.
Samsung did not reveal its net income or details on the performance of its divisions.
The South Korean conglomerate is one of the first global technology companies to release its first-quarter profit estimate for this year.
Samsung benefitted from pent-up demand for products such as smartphones, TVs, laptops and other home appliances as remote working fuelled a greater need for more personal devices.
Industry analysts said the company's smartphone division drove the growth, mainly due to the release of the Galaxy S21 series in January – a month before the usual release of its flagship line-up.
S21 units have sold faster than the preceding S20 series, according to Samsung.
The company’s smartphone shipments rose by 6.2 per cent from a year ago in the fourth quarter to 73.9 million units, according to the International Data Corporation.
The consultancy said it expects the electronics company to have shipped the same range of units from January to March.
Samsung is one of several manufacturers dealing with a severe shortage of semiconductor chips after demand for gadgets picked up amid the coronavirus pandemic.
Last month, the company said it may not release its flagship Galaxy Note series smartphones this year as it looks to reduce production pressures due to the chip shortage.
The company usually releases its Note series – one of its best-selling models because of its stylus S Pen – in August every year.
“It could be a burden to unveil two flagship models in a year, so it might be difficult to release Note model [in the second half]," said D J Koh, co-chief executive of Samsung's information technology and mobile communications division, during an annual general meeting in Seoul last month.
"We seek to release a Note model next year.”
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Updated: April 7, 2021 04:27 PM