Samsung said a weakening Korean won against major currencies positively impacted operating profit in the first quarter to the tune of 400 billion won – reflected mainly in component business earnings. The results beat the 5.53 trillion-won average of analysts’ estimates compiled by Bloomberg.
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Sales rose 6 percent to 49.8 trillion won ($43.4 billion) from a year ago while operating profit was up 12 percent to 6.7 trillion won, broadly in line with the company’s earnings guidance earlier this month.
“This increase was largely due to the early launch and strong global performance of the flagship Galaxy S7 and S7 edge, as evidenced by robust sell-out figures and low inventory levels compared to their predecessors”.
Samsung Electronics launched the latest versions of its flagship Galaxy smartphones on March 11, about a month earlier than the new phone launch a year ago. “But it was thanks to the effect from the S7 (released) one quarter earlier, which is why (I see) a limited reason to revise up the future earnings forecasts”, said Yoo Eui-hyung, an analyst at Dongbu Securities.
Samsung said the IT and mobile communications business, which covers smartphones, posted an operating profit of 3.89 trillion won, up 42 percent from a year earlier. But the company’s smartphone fortunes faded as subsequent flagship handsets failed to excite consumers, leading to seven straight quarters of declining profits.
Boasting an improved camera, waterproofing and microSD storage support, Galaxy S7 models are on track to set a new first-year shipments record, lifting hopes the mobile business will post its first annual profit gain in three years. Its display division posted a loss of 270 billion won while its TV division made 510 billion won in operating profit.
SEOUL, April 28 Samsung Biologics Co Ltd, the biopharmaceutical contract manufacturing affiliate of Samsung Group, said on Thursday that it chose to pursue an initial public offering in South Korea in 2016. The plan includes buying 1.3 million shares and 320,000 preferred shares.
“As for the year ahead, Samsung anticipates softening demand in the smartphone market and negative growth in the tablet market”, the company said, adding that it “will reinforce its leadership in the premium smartphone segment on the back of the Galaxy S7 and S7 edge, while continuing to increase volume and improve profitability in the mid-to-low-end segment”. For the first quarter of 2016, Samsung shipped 81.9 million phones, down slightly from 82.4 million in the same quarter a year ago.
Analysts are divided over whether the strong sales of the Galaxy S7 series would continue during the second quarter.
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Shares of Samsung fell less than 1 per cent in early trading on Thursday.
