Samsung’s operating profit rose to 15.6 trillion won ($ 14.7 billion) between January and March.
Samsung Electronics reported higher-than-expected profits as their memory chip demand remains strong enough to overcome concerns about display supplies for Apple Inc.
According to preliminary results released on Friday from the South Korean-based company Suwon, its operating profit rose to 15.6 trillion won ($ 14.7 billion) in the period from May. January to March 2018, compared with an average forecast of 14.5 trillion won by analysts compiled by Bloomberg.
Business results for the first quarter of this year, including sales of the Galaxy S9 smartphone launched in February, reduced concerns about its display business after iPhone X sales, using Samsung screens. supply, lower than forecast. However, the demand for memory chips used in phones and servers could still help the electronics maker achieve record profits after overtaking Intel last year to become a major chip maker. best of the world.
Lee Jae-yun, an analyst at Yuanta Securities Co. said. “Memory chips are Samsung’s ultimate weapon. That momentum is likely to slow by the end of the year, with price increases likely not as strong as last year.”
Shares of Samsung fell 1.6% at the start of trading in Seoul as the KOSPI fell due to US tax concerns. Its shares have fallen more than 5% year-to-date, after rising 41% in 2017.
Samsung will report its first quarterly results since the company’s heir, Jay Y. Lee, was released in February after being sentenced to prison for bribery. The 49-year-old Vice President traveled to Europe to meet business partners and was discovered in Canada. His father, Chairman Lee Kun-hee, is still hospitalized after a heart attack in 2014.
Sales for the first quarter rose to 60 trillion won, compared with an average forecast of 61.3 trillion won compiled by Bloomberg. The detailed data on companies within the group are likely to be released on April 26, when Samsung holds a press conference.
The semiconductor business makes up the bulk of Samsung’s profits. Prices for 128 gigabit MLC NAND flash memory chips fell 10.7% in the quarter ending in March compared to the quarter ended December last year. Meanwhile, contract prices for 32 gigabyte DRAM server modules rose 5.6 percent in the same period, according to company inSpectrum Tech.
“Memory chip prices will remain high. The memory chip business is more likely to achieve higher profits in 2018,” said Mike Howard, associate director of memory chip research at French research firm Yole Developpement.
Last month at a shareholder meeting, Samsung reorganized its leadership to separate the roles of business executives and board members, responding to a public call for improved character. transparency and accountability.
Kim Yang-jae, an analyst at KTB Securities and Investment, wrote in a pre-sales report from Samsung: “The demand for servers has offset. The decline in sales of iPhone X and Chinese smartphones. Server demand is exceeding market expectations. “
* Source: Investment bridge