Samsung tips best quarterly profit in over three years as chips soar
The Apple Inc rival has rapidly recovered from last year's costly failure of its fire-prone Galaxy Note 7 device, despite a political scandal involving Vice Chairman Jay Y. Lee who appeared in a
The global memory chip leader said first-quarter operating profit was likely 9.9 trillion won ($8.8 billion), compared with an average forecast of 9.4 trillion won from a Thomson Reuters survey of 18 analysts. Revenue rose 0.4 percent to 50 trillion won, just ahead of analysts' forecasts.
"The semiconductor business was likely the main driver for earnings," said Heungkuk Securities analyst
Investors and analysts expect Samsung to report its best-ever quarterly profit in April-June, with the Galaxy S8 smartphone hitting the market on April 21 in Samsung's first premium device launch since the Note 7's withdrawal in October.
Some researchers forecast the S8, which sports the largest screens for Samsung high-end smartphones to date, to set a new first-year sales record.
"Samsung will look to recover market share they lost last year and pump up volumes even if they have to spend more to do so," IBK's Kim said.
All this is happening amid management upheaval at
Lee was arrested in February over his alleged role in a corruption scandal. He denies any wrongdoing.
While Samsung will not provide detailed earnings results until the end of April, analysts tipped its chip division to earn a record 5.8 trillion won in January-March and propel the firm to its best overall operating profit since the third quarter of 2013.
Favourable memory market conditions will likely persist throughout 2017 due to diminishing production gains on investments and careful capacity management among chipmakers.
Growing demand for more firepower from devices such as smartphones and servers have also helped push up margins for Samsung and its rivals in recent quarters.
Samsung shares were down 1.2 percent in early Friday trade, underperforming a 0.2 percent fall for the broader market on profit-taking pressures.
The stock rose 14 percent in January-March, its strongest gain since the first quarter of 2012.