By Joyce Lee
SEOUL (Reuters) – Samsung Electronics (OTC:) Co Ltd likely saw a 45% jump in profit for January-March on robust sales of smartphones, TVs and home appliances, though chip division earnings are seen tumbling after a storm suspended production at its U.S. plant.
Spending more time at home due to the coronavirus pandemic, consumers have splashed out on an array of high-margin consumer electronics which in turn has helped cause a global shortage of semiconductors.
Operating profit for the South Korean tech giant in the quarter is expected to have climbed to 9.3 trillion won ($8.2 billion), according to a Refinitiv SmartEstimate drawn from 16 analysts. SmartEstimates assign more weight to forecasts from consistently accurate analysts.
That would mark Samsung (KS:)’s highest operating income level for the first quarter since 2018. Revenue likely rose 12%.
Samsung is scheduled to announce preliminary first-quarter results on Wednesday.
In particular, its mobile division looks like it had a stand-out quarter, benefiting from the launch of its Galaxy S21 series in mid-January – more than a month ahead of the flagship model’s usual annual release schedule.
The world’s largest smartphone maker is estimated to have cornered roughly 23% of global market in the quarter, thanks to that launch and cheaper-than-usual pricing for its premium devices, according to Counterpoint Research. The S21, for example, was priced $200 lower than the S20.
That compares with 20% market share in the same quarter a year ago and 16% market share in the previous quarter when arch-rival Apple Inc (NASDAQ:) released the iPhone 12.
High-margin accessories such as Galaxy Buds did brisk business as well, analysts said. They estimate operating profit for the division likely soared by more than 1 trillion won from a year earlier to about 4.15 trillion won.
Samsung’s TV and home appliance business is expected to see operating profit more than double to around 1 trillion won.
Despite stratospheric demand worldwide for chips, profits for Samsung’s semiconductor division are expected to have fallen by roughly a fifth to 3.6 trillion won.
The division has been hampered by the cost of ramping up new production and losses at its Texas factory after a winter storm halted output in mid-February. Samsung said production at the plant had returned to near-normal levels as of late March.
Analysts have estimated the losses related to the Texas factory shutdown at around 300-400 billion won.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.