Samsung quarterly revenue tops market expectations

SEOUL: Samsung Electronics Co Ltd has reported an estimated 50% bounce in quarterly working earnings to publish its highest first-quarter revenue since 2018, beating expectations as strong demand underpinned costs for reminiscence chips.

Earnings on the world’s largest reminiscence chip and smartphone maker had been additionally supported by brisk smartphone gross sales within the quarter, together with a disruption at a rival NAND Flash chip plant, analysts mentioned.

Samsung put its first-quarter revenue at 14.1 trillion received (US$11.6bil or RM48.81bil) in a preliminary earnings launch, versus a Refinitiv SmartEstimate of 13.3 trillion received (RM46.04bil). Income doubtless rose 18% from the identical interval a 12 months earlier to a file 77 trillion received (RM266.58bil), additionally above market expectations.

“The steering beat market expectations, most likely resulting from reminiscence chip shipments and costs being higher than anticipated,” mentioned Park Sung-soon, analyst at Cape Funding & Securities.

Though reminiscence chip costs dipped within the first quarter, analysts mentioned strong demand from information heart purchasers in addition to cautious funding spending by chipmakers and restricted capability growth buoyed Samsung’s chip earnings, which make up about half of its complete earnings.

The chipmaker additionally doubtless benefited from a disruption at a rival NAND Flash chip plant owned by Japan’s Kioxia and American agency Western Digital resulting from contamination of uncooked supplies.

“After the contamination situation at Kioxia, I believe there have been rush orders for NAND Flash chips made to Samsung for merchandise that had been meant to be secured from Kioxia,” Park mentioned.

The disruption on the Kioxia plant in early February is anticipated to drive up NAND Flash costs by 5% to 10%, offsetting the results of modestly excessive inventories maintained by patrons, information supplier TrendForce mentioned.

Samsung shipped an estimated 72 million smartphones within the first quarter, Counterpoint Analysis mentioned, down some 11% from a 12 months earlier, largely resulting from a later than common launch of its latest flagship smartphone, the Galaxy S22.

The Galaxy S22 sequence globally bought some 50% extra within the first week after its late February launch than its earlier mannequin S21, in accordance with Sujeong Lim, an affiliate director at Counterpoint.

Samsung is estimated to have shipped barely over six million items of the S22 sequence by the top of March, Lim mentioned, including that gross sales had been according to preliminary expectations.

Samsung is because of launch detailed earnings on April 28, when buyers will likely be to listen to feedback on its plans, the way it proposes to function its reminiscence chip enterprise to spice up profitability, and the chip demand outlook. Samsung shares fell 0.2% in morning commerce, versus a 0.9% drop within the wider market. — Reuters


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