Samsung forecasts higher operating income in the first quarter, despite supply difficulties

Samsung, the world’s largest smartphone maker, expects operating profit of about 14.1 trillion won (10.6 billion euros) in the first three months of the year, up from 9.4 trillion won a year earlier. year earlier, he announced in a statement on Wednesday, April 6, an operating profit up 50.3%. The group, which is due to publish its quarterly results on April 28, did not, however, give detailed information concerning each of its different entities. Analysts have estimated that the sharp rebound expected in operating income between January and March was most likely due to a good performance in the smartphone branch and strong demand for memory chips.

“The decline in memory chip prices will be contained thanks to higher than expected demand,” Kim Un-ho, an analyst at IBK Investment & Securities, commented in a note. According to him, the group should record a 17% increase in its operating income over the whole year to 60.5 trillion won. The quarterly profit of the mobile branch alone should jump 55.8% compared to the fourth quarter of 2021, to 4.1 trillion won, he predicted.

Record sales in the 4th quarter

Samsung explained at the end of January that it had achieved “record sales in the fourth quarter despite the continuing uncertainty linked to competitive products”, citing solid demand for its high-end smartphones. The company had notably taken advantage of high chip prices and strong demand to achieve record annual revenue in 2021 at 279.6 trillion won (207 billion euros), an 18% jump from 2020. from Samsung recently had a bad run in South Korea due to an issue with a pre-installed app on the latest Galaxy S line of phones.

The issue forced Samsung Vice Chairman Han Jong-hee to apologize at a shareholder meeting in March and sparked a class action lawsuit by nearly 2,000 consumers demanding 300,000 won each in compensation. But sales of its latest Galaxy S22 series are expected to exceed 1 million units in South Korea on Friday in the first six weeks on the market. “This is a significant achievement given the difficulties in the global supply chain,” Samsung said in its statement Wednesday.

The health crisis has boosted demand for IT devices

The Covid-19 pandemic has wreaked havoc on the global economy but it has benefited many companies in the technology sector. Generalized teleworking to stem the spread of the coronavirus has indeed boosted demand for devices equipped with Samsung chips, from computers to household equipment such as televisions and washing machines. Samsung has markedly increased its investments in the semiconductor industry, the worldwide shortage of which affects many sectors such as the automobile, household equipment, mobile telephony and video game consoles.

In November, he announced plans to build a $17 billion microchip production line in Taylor, Texas. The new factory should be operational by the end of 2024. The giant is also working to develop in advanced technologies such as artificial intelligence, robotics and 5G/6G communications. Samsung Electronics is the flagship subsidiary of giant Samsung Group, by far the largest of the family empires, known as the chaebols, that dominate business in South Korea. The conglomerate’s turnover is equivalent to about one-fifth of South Korea’s Gross Domestic Product.

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Samsung forecasts higher operating income in the first quarter, despite supply difficulties

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