Seoul: Samsung Electronics posted a near 40 percent fall in first quarter net profit yesterday, missing analyst estimates despite a surge in memory chip demand that cushioned a slump in smartphone sales.
Facing increasing competition from arch rival Apple and smaller Chinese manufacturers, the world’s top handset maker reported a net profit of 4.6 trillion won ($4.3bn) for the January-March period, down 38.9 percent from a year earlier.
Operating profit also fell 29.6 percent on-year to 6.0 trillion won, largely in line with the firm’s earlier forecast. But in a sign that the South Korean electronics giant might be turning a corner, the operating profit was up 13.1 percent from the fourth quarter of last year.
The firm’s latest earnings still stood in stark contrast to Apple which this week reported a 33 percent surge in net profit to $13.6bn in the first quarter thanks to blockbuster sales of the iPhone 6, especially in the Chinese market.
In its earnings statement, Samsung said it expected overall earnings to increase in the second quarter as premium smartphone sales enter “into full swing.”
The company shipped 99 million handsets globally in the first quarter — more than 80 percent of them smartphones, Robert Yi, Samsung’s head of investor relations, said in a conference call.
Handset shipments in the second quarter are expected to remain on the same level, he added. Samsung is pinning its hopes on the sixth edition of its flagship high-end smartphone launched in April.
The Galaxy S6 and S6 Edge with a wraparound screen received rave reviews but Samsung cautioned competition would intensify in rapidly growing emerging markets.
“In 2015, continued growth is expected due to the growth of emerging smartphone markets such as China and India as well as the global expansion of the LTE business,” the earnings’
statement said. AFP
