Samsung Elec likely to report highest Q1 profit since 2018 on chips -Breaking
By Joyce Lee
SEOUL (Reuters) – Samsung Electronics (OTC:) Co Ltd is prone to put up its highest first-quarter revenue since 2018, analysts’ estimates confirmed, pushed by brisk income on reminiscence chips as strong demand helped to maintain costs firmer than anticipated.
Working revenue for the world’s largest smartphone and reminiscence chip maker seemingly hit 13.3 trillion received ($10.9 billion) within the quarter led to March, in keeping with a Refinitiv SmartEstimate from 13 analysts, which is weighted towards those that are extra constantly correct. That will be up 41% from 9.38 trillion received a 12 months earlier and the very best revenue for its comparatively sluggish first quarter since 2018.
The South Korean tech big will announce preliminary outcomes on Thursday.
Samsung (KS:)’s Q1 chip revenue is prone to attain 7.6 trillion received, greater than double the earlier 12 months’s 3.37 trillion received, in keeping with a mean forecast of six analysts.
Its chip enterprise contributes about half of the tech big’s income.
Chip costs held up higher than anticipated within the first quarter, analysts mentioned, regardless of pulling again after a surge over the previous 12 months when shoppers constructed up shares to protect in opposition to provide chain bottlenecks. They famous that robust demand and cautious funding spending had given a lift to the sector.
“Stable chip demand from information centres, chipmakers’ conservative funding to defend in opposition to falling costs, and high-end product gross sales have restricted the decline in reminiscence chip costs,” mentioned Doh Hyun-woo, analyst at NH Funding & Securities.
Samsung’s cellular enterprise revenue is estimated at 4.04 trillion received in keeping with a mean forecast of six analysts, barely down from the earlier 12 months’s 4.39 trillion received however above its cellular income throughout the identical interval in 2017-2020.
Samsung launched its flagship Galaxy S22 smartphone in February, which seemingly bought about 8 million models in the course of the first quarter in keeping with Greg Roh, head of analysis at Hyundai Motor Securities.
Samsung has the most important share of Russia’s smartphone market at about 30 p.c, however Roh mentioned a halt in shipments there would have little impact since Russia and Ukraine account for less than an estimated 2% of Samsung’s complete, and this might be offset by gross sales to different areas.
Samsung mentioned 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 keeping with social media messages. Samsung shares have fallen about 12% year-to-date, harm by worries over the impression of the Ukraine disaster on international 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 have been progressively bettering.
($1 = 1,216.4000 received)
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