© Reuters. FILE PHOTO: The brand of Samsung Electronics is seen at its workplace constructing in Seoul, South Korea South Korea, October 11, 2017. REUTERS/Kim Hong-Ji
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By Joyce Lee and Heekyong Yang
SEOUL (Reuters) -Samsung Electronics Co Ltd reported on Thursday an estimated 50% leap in quarterly working earnings to publish its highest first-quarter revenue since 2018, beating expectations as strong demand underpinned costs for reminiscence chips.
Earnings on the world’s largest reminiscence chip and smartphone maker have been additionally supported by brisk smartphone gross sales within the quarter, together with a disruption at a rival NAND Flash chip plant, analysts stated.
Samsung (KS:) put its first-quarter revenue at 14.1 trillion gained ($11.6 billion) in a preliminary earnings launch, versus a Refinitiv SmartEstimate of 13.3 trillion gained. Income possible rose 18% from the identical interval a yr earlier to a document 77 trillion gained, additionally above market expectations.
“The steering beat market expectations, in all probability resulting from reminiscence chip shipments and costs being higher than anticipated,” stated Park Sung-soon, analyst at Cape Funding & Securities.
Though reminiscence chip costs dipped within the first quarter, analysts stated strong demand from knowledge centre shoppers in addition to cautious funding spending by chipmakers and restricted capability growth buoyed Samsung’s chip earnings, which make up about half of its whole income.
The chipmaker additionally possible benefited from a disruption at a rival NAND Flash chip plant owned by Japan’s Kioxia and American agency Western Digital (NASDAQ:) resulting from contamination of uncooked supplies.
“After the contamination problem at Kioxia, I feel there have been rush orders for NAND Flash chips made to Samsung for merchandise that have been meant to be secured from Kioxia,” Park stated.
The disruption on the Kioxia plant in early February is predicted to drive up NAND Flash costs by 5%-10%, offsetting the consequences of modestly excessive inventories maintained by patrons, knowledge supplier TrendForce stated.
Samsung shipped an estimated 72 million smartphones within the first quarter, Counterpoint Analysis stated, down some 11% from a yr earlier, largely resulting from a later than typical launch of its latest flagship smartphone, the Galaxy S22.
The Galaxy S22 sequence globally bought some 50% extra within the first week after its late February launch than its earlier mannequin S21, in accordance with Sujeong Lim, an affiliate director at Counterpoint.
Samsung is estimated to have shipped barely over 6 million models of the S22 sequence by the tip of March, Lim stated, including that gross sales have been in step with preliminary expectations.
Samsung is because of launch detailed earnings on April 28, when traders can be to listen to any feedback on its M&A plans, the way it plans to function its reminiscence chip enterprise to spice up profitability, and chip demand outlook.
Samsung shares fell 0.2% in morning commerce, versus a 0.9% drop within the wider market.
($1 = 1,218.1800 gained)
