Synopsis
On April 8, 2023, Samsung Electronics announced a slight 0.15% decrease in its first-quarter operating profit compared to the previous year, despite surpassing market expectations due to strong sales of its flagship Galaxy S25 smartphones.Key Takeaways
- Samsung's Q1 operating profit decreased by 0.15%.
- Operating profit estimated at 6.6 trillion won.
- Sales increased by 9.8% to 79 trillion won.
- Galaxy S25 smartphones contributed to better-than-expected performance.
- Final earnings report to be released later.
Seoul, April 8 (NationPress) Samsung Electronics revealed on Tuesday that its operating profit for the first quarter has decreased by 0.15% compared to the previous year, yet it surpassed market forecasts due to robust sales of its latest flagship smartphones. The leading global memory chip manufacturer anticipates an operating profit of 6.6 trillion won (approximately US$4.5 billion) for the quarter ending in March.
This operating profit is 33.5% higher than the average market estimate of 4.9 trillion won, as per a survey conducted by Yonhap Infomax, the financial data division of Yonhap News Agency.
Sales saw a significant rise of 9.8%, reaching 79 trillion won. Data regarding net income remains unavailable.
Industry analysts suggest that the stronger-than-expected performance could be linked to the popularity of the new Galaxy S25 smartphones, which launched in February.
Samsung Electronics has not disclosed a detailed earnings report for its business segments; however, market predictions indicate that the company's semiconductor sector likely generated around 1 trillion won in operating profit for the first quarter.
The final earnings report is scheduled for release later this month.
Some analysts predict a rebound in Samsung Electronics' earnings during the second quarter, propelled by a resurgence in memory chip demand from China and increasing prices for dynamic random access memory (DRAM) products.
"Shipments of memory chips are expected to recover, and prices for memory products like DDR5 and NAND flash are also forecasted to rise in the second quarter," stated Han Dong-hee, an analyst at SK Securities Co.
Nevertheless, others remain cautious, highlighting uncertainties stemming from U.S. President Donald Trump's tariff regulations and Samsung Electronics' underwhelming performance in the high-margin high bandwidth memory (HBM) sector.
Reports indicate that Samsung Electronics' HBM chips have faced challenges in passing quality tests set by Nvidia Corp., hindering the company's ability to participate in the global HBM supply chain, which is currently led by Nvidia, SK Hynix Inc., and TSMC.
"Even if Samsung's HBM products receive approval, it will be challenging for the company to experience a substantial profit increase, as its rivals have already secured orders from Nvidia," remarked Noh Geun-chang, an analyst at Hyundai Motor Securities Co. "While a rebound in memory demand and prices is anticipated, it may not be robust or sustained."
