Samsung expects record profits despite slowing display sales
Samsung Electronics has projected another record operating profit for the first quarter after last year’s stellar performance, as strong demand for memory chips offset slowing sales of display panels.
The technology giant estimated operating profit for the first three months of 2018 at Won15.6tn ($14.7bn), up 58 per cent from a year earlier. It was much higher than Won14.5tn forecast by analysts polled by Reuters. The company expected to register sales of Won60tn for the first quarter, up 19 per cent from a year earlier.
Analysts say memory chips remained the main driver of Samsung’s earnings, accounting for about 70 per cent of its operating profit, despite concerns that the industry cycle may have peaked. They estimate operating profit from the semiconductor business at about Won10.7tn as strong D-ram demand for computer servers offset falling prices of Nand flash memory chips.
But operating profit from its display unit, especially the premium organic light-emitting diode (OLED) business, was hit by slow sales of Apple’s iPhone X, analysts said. Samsung, a key manufacturer of OLED screens, is expected to cut capacity investment in the leading-edge technology as it grapples with overcapacity.
Samsung’s mobile business is believed to have fared well in the January-march period, helped by favourable market reception to its latest flagship smartphone Galaxy S9. Strategy Analytics estimated Samsung shipped 9.3m units of the premium smartphone launched in late February in the first quarter. Analysts expect the full-year sales of Galaxy S9 phone to be similar to its predecessor’s.
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