Brisk chip, S9 sales power Samsung to record profit - Mobile World Live

Brisk chip, S9 sales power Samsung to record profit

26 APR 2018

Samsung Electronics reported a surge in its net profit for the first quarter of 2018 thanks to a strong performance across most of its divisions, with the company’s semiconductor and mobile device businesses clocking in 33 per cent and 23 per cent growth respectively.

On a group level, Q1 net profit jumped 52.2 per cent year-on-year to KRW11.69 trillion ($10.8 billion), a record high for the company. Consolidated revenue rose 19.8 per cent to KRW60.56 trillion, led by its memory business and stronger sales of its flagship mobile products.

Its IT and mobile communications division posted a 21 per cent year-on-year increase in revenue to KRW28.45 trillion, with its mobile unit growing 23 per cent to KRW27.66 trillion. The company said the growth was mainly driven by premium models due to the early release of the Galaxy S9 and S9+ as well as solid sales of existing models like the S8.

Short-term weakness
Lee Kyeong-tae, VP of mobile communications business, said in an earnings call the popularity of the S9+ with its dual cameras and increased sales of S9 models with higher memory capacity significantly contributed to its first quarter earnings.

Looking to Q2, he expects overall demand for smartphones to increase slightly due to the release of new models, but “our shipments are likely to decline quarter-on-quarter as we discontinue production of old, midrange models.” Other impacts on sequential comparisons will include “a slowdown in sales of flagship models and increased marketing expenses”.

For the second half, Lee said the company plans to strengthen sales in the premium market by launching a new flagship model and maintaining long-tail sales of the Galaxy S9, S9+ and previous flagship models. For the mid-range segment, it plans to introduce new models targeted at specific markets and strengthen offline and online sales channels. In addition, he said it will continue to invest in expanding the Bixby 2.0 open ecosystem to provide a seamless multi-device experience for consumers.

The company said earnings for the networks business improved due to LTE investments from major operator partners and the addition of systems to optimise network operations.

Revenue from its semiconductor business increased 33 per cent to KRW20.8 trillion due to strong demand for server and graphic memory, while sales at its consumer electronics unit dipped 5 per cent to KRW10.22 trillion on weak TV demand.

Regarding a previously announced stock split, trading of its original shares will be suspended from 30 April to 3 May and new shares will start trading on 4 May.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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