Samsung's operating income grows 3.43% to $5.2 billion in Q1

Source :IANS
Author :IANS
Last Updated: Wed, Apr 29th, 2020, 18:51:49hrs
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Seoul: Delivering a solid first-quarter earnings performance on the back of its chip business despite the coronavirus pandemic, Samsung Electronics on Wednesday said its operating income increased 3.43 percent year-on-year to $5.2 billion in the January-March period, and sales rose 5.61 per cent year-on-year.

However, the world's leading memory chip and smartphone manufacturer expects its bottom line to go down in the current quarter as the pandemic will significantly affect demand for some of its key products, particularly its mobile business.

"Memory demand is expected to remain robust for servers and PCs as more people work from home, but it is possible the mobile market may soften," the company said in a statement.

"Sales and profits of set products business, including smartphones and TVs, are expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally," it added.

In the first quarter of 2020, Samsung's net profit, however, dipped 3.15 per cent to 4.8 trillion won over the cited period due to decreased gains from equity ties and increased non-operating expense.

The figures were in line with the earnings guidance announced earlier this month that beat the market consensus.

Samsung's solid performance in the first quarter was led by its semiconductor business, as increased demand for server chips used for data centres and the steady rise of memory chip prices helped the company stay afloat amid the coronavirus crisis.

The company said its improved product mix in the mobile business and additional diversification of the company's customer base in mobile OLED display also contributed to its estimate-beating first quarter earnings result, reports Yonhap news agency.

Samsung's mobile business also had a better-than-expected first quarter earnings result despite weakening sales affected by supply chain disruptions in China.

Samsung said it sold 64 million units of smartphones and 5 million units of tablets in the first quarter, down 11 million and 2 million units respectively from the previous quarter, with the average selling price of its mobile devices at $266.

Samsung's home appliance business division posted weak earnings. Its sales increased 2.58 percent on-year to 10.30 trillion won in the first quarter, but operating profit dropped 16.6 percent on-year to 450 billion won over the same period.

The company blamed weaker seasonality and impact from COVID-19 for its lower earnings in the sector.

Samsung said its TV sales in the first quarter declined by mid-20 per cent compared to the previous quarter. The world's leading TV vendor added that its TV sales are projected to decline by 10 per cent in the second quarter.

For its consumer electronics, Samsung said it will pursue "efficient marketing and promotions tailored to each region" and will minimize the virus impact by optimizing its logistics.