On Thursday, Samsung Electronics anticipated a 50.00% jump in the first-quarter operating earnings as solid demand underpinned prices for memory chips.
The world’s largest memory chip and smartphone maker expected a Q1 profit of $11.66 billion. This estimate came in higher than the market consensus of $10.90 billion.
At the same time, it edged up from 7.70 billion a year earlier. This figure marks its highest profit since 2018.
In addition, it expected revenue to rise 18.00% to $63.00 billion from the same period in 2021. Moreover, the company will release detailed earnings on April 28.
Samsung Electronics’ earnings received support from brisk smartphone sales in the quarter.
Consequently, it benefitted from a disruption at a rival NAND Flash chip plant due to contamination of raw materials.
The halt in the factory drove prices by 5.00% to 10.00% higher. This would offset the effects of modestly high inventories maintained by buyers.
Analysts explained that the positive outlook is due to the better-than-expected memory-chip shipments and prices.
Despite the global supply bottleneck and recent geopolitical risks, the South Korean giant reported strong demand for its data centers.
Eventually, the cautious investment spending by chipmakers and limited capacity expansion also buoyed the firm’s chip earnings.
Meanwhile, Samsung shipped about 72.00 million smartphones in the first quarter, down 11.00% from a year earlier.
This lower record is due to a later than usual release of its newest flagship smartphone.
The Galaxy S22 series sold 50.00% more than its previous model in the first week after its late February launch.
Then, experts projected the company to ship 6.00 million units of the S22 series by March.
Samsung Electronics halts shipments to Russia
Last month, Samsung Electronics halted its shipments to Russia amid the ongoing geopolitical crisis.
The tech giant is leading in handsets in Moscow with a 30.00% market share as of the fourth quarter.
Nevertheless, analysts explained that the suspension would have little effect on the business’ profit.
The Kremlin and Kyiv account for an estimated 2.00% of Samsung Electronics’ total profit. Correspondingly, the sales to other regions would offset the impact of the stoppage.
Meanwhile, the company traded 13.36% or 8.62 lower since the start of the year. Investors are worried over the impact of the Ukraine crisis on global tech device demand.
Furthermore, there are concerns about low production yields at its cutting-edge contract chip manufacturing operation.
