SEOUL (Reuters) – Samsung Electronics Co Ltd is likely to submit its highest first-quarter profit since 2018, analysts’ estimates confirmed, pushed by brisk earnings on reminiscence chips as strong demand helped to hold costs firmer than anticipated.
Operating profit for the world’s largest smartphone and reminiscence chip maker likely hit 13.3 trillion gained ($10.9 billion) within the quarter resulted in March, in accordance to a Refinitiv SmartEstimate from 13 analysts, which is weighted towards those that are extra persistently correct. That can be up 41% from 9.38 trillion gained a yr earlier and the highest profit for its comparatively sluggish first quarter since 2018.
The South Korean tech large will announce preliminary outcomes on Thursday.
Samsung’s Q1 chip profit is likely to attain 7.6 trillion gained, greater than double the earlier yr’s 3.37 trillion gained, in accordance to a mean forecast of six analysts.
Its chip enterprise contributes about half of the tech large’s earnings.
Chip costs held up higher than anticipated within the first quarter, analysts stated, regardless of pulling again after a surge over the previous yr when shoppers constructed up shares to guard towards provide chain bottlenecks. They famous that sturdy demand and cautious funding spending had given a lift to the sector.
“Solid chip demand from information centres, chipmakers’ conservative funding to defend towards falling costs, and high-end product gross sales have restricted the decline in reminiscence chip costs,” stated Doh Hyun-woo, analyst at NH Investment & Securities.
Samsung’s cell enterprise profit is estimated at 4.04 trillion gained in accordance to a mean forecast of six analysts, barely down from the earlier yr’s 4.39 trillion gained however above its cell earnings throughout the identical interval in 2017-2020.
Samsung launched its flagship Galaxy S22 smartphone in February, which likely bought about 8 million models through the first quarter in accordance to Greg Roh, head of analysis at Hyundai Motor Securities.
Samsung has the most important share of Russia’s smartphone market at about 30 %, however Roh stated a halt in shipments there would have little impact since Russia and Ukraine account for under an estimated 2% of Samsung’s complete, and this is able to be offset by gross sales to different areas.
Samsung stated in March that shipments to Russia had stopped after the invasion of Ukraine, though companies comparable to Samsung Pay proceed to be supplied in Russia in accordance to social media messages. Samsung shares have fallen about 12% year-to-date, damage by worries over the influence of the Ukraine disaster on world tech system demand and issues about low manufacturing yields at its cutting-edge contract chip manufacturing operation.
Samsung’s co-CEO final month addressed shareholder issues about its manufacturing processes for chips with 5-nanometre or narrower circuitry, saying they had been step by step bettering.
($1 = 1,216.4000 gained)
(Reporting by Joyce Lee; Editing by Edmund Klamann)
