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Samsung flags higher Q1 profits

April 7, 2015

South Korean electronics giant Samsung has said it is expecting to beat analysts' expectations with its first-quarter results. The company highlighted higher demand in the memory chip sector and lower production costs.

Samsung Electronics HQ
Image: REUTERS

Samsung Electronics said Tuesday it was likely to post better-than-expected operating earnings for the first quarter.

The South Koreans flagged an operating profit of 5.9 trillion won ($5.4 billion, 4.93 billion euros) for the January-March period in its estimate ahead of official figures to be released towards the end of the month.

While the quarterly figure would mark a 30.5-percent drop from a year ago, it would mean an 11.5-percenr rise month-on-month.

S6 to the rescue?

The company did not specify expected bottom-line profit, nor did it give any breakdown of divisional earnings. But analysts attributed the expected improvement on the last quarter to profits from high-margin chip sales which were said to have offset the downturn in the firm's overgrown mobile sector.

Samsung has been grappling with competition on several fronts, including Apple in the high-end market and burgeoning Chinese firms like Xiaomi in the mid- and low-end market. Samsung is currently pinning high hopes on its new Galaxy S6 handset, after the S5 flopped last year.

Several market trackers had Samsung and Apple tied in worldwide smartphone sales in the final quarter of 2014, while at least one suggested Apple had regained the throne from the South Koreans.

One analyst said Samsung's new mobile phone - set to hit stores Friday - would help turn things around further for the company trying to reposition itself on the saturated mobile phone market.

"I estimated the second-quarter operating profit at 6.4 trillion won but plain to raise it," said Nam Dae-Jong from Seoul-based Hana Daetoo Securities.

hg/cjc (Reuters, dpa)

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