Robust chip sales help Samsung's Q1 2022 profits rise despite COVID-19

Terminal updated: Apr seventh, 2020 at 05:59 UTC+01:00

Samsung has announced its earnings guidance for the first quarter of 2020 earlier today, and the company said that its sales volition rise compared to the start quarter of last year. Notwithstanding, the numbers won't be quite as strong as what analysts had initially expected. Samsung'southward shares were up 1.5% in Due south Korea subsequently the earnings guidance was made public.

Co-ordinate to the company'southward press release, Samsung expects consolidated sales of KRW 55 trillion ($44.ix billion) and an operating profit of KRW half-dozen.4 trillion ($v.2 billion). The profits are up 2.73 percent compared to the numbers from Q1 2019. While the visitor's latest earnings are higher compared to the first quarter of final yr, analysts had predicted slightly higher numbers than Samsung's ain estimates.

Last year, the South Korean firm reported sales of KRW 52.39 trillion ($42.viii billion) and an operating profit of KRW vi.23 trillion ($five.1 billion). Samsung reported an operating margin of only eleven.6 per centum for the latest quarter, which is lowest since the third quarter of 2016. The company is expected to have shipped just lx million smartphones in Q1 2020 compared to 72 million in Q1 2019.

Strong flake sales cushioned the smartphone sales drib

The Galaxy S20 series has been selling quite poorly. Samsung had predicted last calendar month that its revenues from smartphones and consumer electronics would take a hit due to the COVID-19 state of affairs. Withal, the South Korean company said that information technology expected the need from data centers to make up for the losses in the consumer electronics business.

While Samsung didn't reveal the breakdown of its earnings, more than KRW four trillion ($iii.27 billion) of the company'due south operating profit is said to take come from the chips business concern. More people have started working from home during the lockdown period, which led to the ascent in demand from information centers that back up team collaboration software, video conferencing tools, and video streaming services.

The company's mobile business organisation is bracing for a bigger hit in Q2 2020 as consumers hold off making big-ticket purchases after looking at the grim economical state of affairs worldwide. Samsung was initially expected to sell 300 meg smartphones, simply analysts take cutting the estimates to 260 million.

Samsung Q1 2020 Earnings Guidance Revenue Profits Estimates