The solid profits aren’t simply a sign that Samsung is fending off its competitors – lower marketing spending for the mobile business also helped bolster the bottom line.
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Upon release of its 2015 quarter four results, Samsung had stated that in the premium smartphone segment it “aims to reinforce its market leadership and drive growth with differentiated and innovative products”. Analysts revised their first-quarter sales forecasts for the Galaxy S7 smartphones sharply higher to about 10 million units from 5 million to 7 million units.
The estimated earnings hovered far above the market consensus of 5.6 trillion won by 22 South Korean brokerage houses, according to data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency.
Samsung Electronics announced Thursday that it expects a better-than-expected jump in operating profit in the first quarter of 2016. First, better-than-expected shipments in Samsung’s new flagship Galaxy S7 would improve the company’s average sales prices of smartphones, which could boost margins.
Some market watchers believe the Galaxy S7’s success will influence future Samsung device releases.
Competition from Apple’s latest iPhone SE and Huawei’s forthcoming P9 flagship smartphone were also putting a dampener on market enthusiasm.
The company reported unexpectedly upbeat quarterly predictions earlier in the week, expecting to report consolidated sales of about 49 trillion won and operating profit of about 6.6 trillion won in the first quarter of 2016. For now, though, Samsung is sure to have more details about their performance when they release their full report later this month.
Based on the stellar Galaxy S7 reviews, it’s no surprise that the handset is selling in abundance. “Samsung will probably not see a higher rise in profit than it did this quarter for the rest of the year”, he added.
However, early gains in its share price on Wednesday were soon erased, with traders citing fears that Samsung’s move to release the S7 early had merely brought sales forward.
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The Android Marshmallow update 6.0.1 is also expected to come for users of Samsung Galaxy Tab S, Galaxy Tab S2 and Galaxy Note Pro 12.2, but there’s no confirmation yet from the South Korean tech giant on this new round of rumors.
