Samsung Electronics Co. Ltd. beat analyst estimates for its first-quarter earnings on strong demand for its mobile devices.
For the quarter ended March 31, Samsung reported revenue of KWN 65.39 trillion ($59 billion), up 18% from the same quarter of 2020 and a record for its first quarter. Net income shot up 46% from a year ago, to KWN 7.1 trillion ($6.4 billion). According to Bloomberg, net income was predicted by analysts to come in at KWN 6.7 trillion in the quarter.
The rise in sales was driven by Samsung’s flagship Galaxy S21 smartphone range launched in January. Samsung booked mobile sales of KWN 28.2 trillion ($25.5 billion) in the quarter, up 31% from the previous quarter and 13% year-over-year. Samsung noted that demand had recovered from a year earlier when the market was significantly affected by the COVID-19 pandemic.
Samsung’s consumer electronic business also saw strong numbers in the quarter with KWN 12.99 trillion ($11.7 billion) in sales, up 26% year-over-year but down 5% over the previous quarter, which was boosted by holiday sales.
Where Samsung struggled in the quarter was with its semiconductor business. Profit declined in the quarter after its factory in Austin, Texas, was knocked offline during a winter storm in February, and a decline NAND flash memory chip prices. Amid global chip shortages, Samsung also spent additional funds in the quarter expanding in-house foundries.
For the quarter ahead, Samsung predicted a mixed bag of results. The company is predicting that earnings for its semiconductor business will improve thanks to strong server demand and a full return to production at its Texas plant. On the flip side, however, Samsung said it expects its mobile business to see a revenue and profit decline as flagship smartphone sales fall and some components experience supply issues.
For its consumer electronics division, Samsung added that it expects increased sales in televisions with the assumption that major sporting events such as the Tokyo Olympic Games and the EUFA Euro 2020 football competition take place.
The mention of component shortages comes after Samsung’s main rival Apple Inc. reported its earnings earlier today and warned of chip shortages.
Samsung shares were steady on the Korea Exchange, up a quarter-point, to KWN 82,200 ($74.25).
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