EVEN without Christmas or the benefit of a new hit device, Samsung Electronics posted near-record earnings in the first quarter. Profit is set to surge when the Galaxy S4 smartphone goes on sale this month.
The cellphone business again was the company’s biggest earnings driver, with sales of cheaper handsets in emerging markets supplementing growth by high-end Galaxy models. Operating profit rose to about 8.7 trillion won (R68.5 billion) in the three months to March 31, from 5.69 trillion won a year earlier, Asia’s biggest technology company said on Friday.
“Second-quarter profit looks even better… as the Galaxy S4 will have a great impact,” said Chung Chang Won, an analyst at Nomura Holdings. “Samsung’s shipments of its flagship smartphone will outpace that of the iPhone sometime in the second or third quarter.”
Operating profit for the first quarter of the year almost matched the record 8.84 billion won for the preceding quarter, which included the year-end holiday season. Analysts estimate the current quarter could reach 9.3 trillion won as Samsung releases the S4 in the US on April 26 and tries to reclaim the top spot in sales from Apple.
Samsung, which is scheduled to release audited earnings results later this month, fell 0.7 percent to 1 505 000 won in Seoul trading on Friday, compared with a 1.6 percent decline for South Korea’s benchmark Kospi index. The shares have declined 1.1 percent this year, compared with a 20 percent drop for Apple.
First quarter profit beat the 8.38 trillion won average of 39 analyst estimates compiled by Bloomberg before the announcement. Sales rose to about 52 trillion won from 45.27 trillion won a year earlier, Samsung said. It did not give net income figures or results for individual divisions.
“In addition to the Galaxy S3, mini models sold well in emerging markets, including China, Brazil and India,” Lee Sei Cheol, an analyst at Meritz Securities, said by phone before the earnings release. “Samsung’s continued ascent in the smartphone industry seems to be unparalleled.”
Samsung plans to release three smartphones this year, including the S4, a Galaxy Note and a device using the Intel-backed Tizen operating system. The handset market grew almost 12 percent last year to $358bn (R3.2 trillion) in sales, according to the International Data Corporation.
It unveiled the S4 on March 14 in New York as it chases Apple in US sales. With a 5-inch screen, 13-megapixel camera and motion-detecting technology so users can control features with face movements, the phone would be available globally by May, Samsung said last month.
Apple extended its lead over Samsung in US smartphone subscriptions in the three months to February, research company Comscore said on Thursday.
Apple’s average share of smartphone subscribers in the US rose to 38.9 percent, from 35 percent in the three months to November 30, it said. Samsung’s share rose to 21.3 percent from 20.3 percent.
Samsung’s first-quarter smartphone shipments probably increased 11 percent from the preceding quarter, said Song Myung Sup, a Seoul-based analyst at HI Investment & Securities. With the S4 and the new Note scheduled for release this year, the mobile division would not reach its peak until the third quarter at the earliest, when Apple was expected to introduce a new iPhone, Song said.
The company’s shipments of flagship models might total 37.8 million units in the second quarter, Lee Seung Woo, an analyst at IBK Securities, said in a March 26 report. The average selling price might rise 17 percent, bringing operating profit at the mobile business to about 7.9 trillion won, Lee said.
Samsung’s total smartphone shipments might grow to 82 million units in the second quarter from 68.5 million in the first quarter, he added.
It probably boosted first-quarter operating profit in all segments including displays, chips and consumer electronics, according to the analysts surveyed. – Bloomberg
No comments:
Post a Comment