Samsung has forecasted their recovery in marketing records by recording their first quarter business profit with 5.5 billion USD.
Semiconductor business is going well and with Galaxy S6 expanded sales in 2nd quarter, IT Mobile(IM) just might have improvement in their records as well. Samsung Electronics’ recovery of 1st quarter sales record even gave higher expectations of reviving Korea’s overall industry.
◇Industry Expecting Warm Breeze
Samsung Electronics has recorded 5.4 billion USD for 1st quarter business profit on the 7th. That is 11.5% increase compared to last year’s 4th quarter record (4.8 billion USD). It decreased by 30.5% compared with same period last year (7.8 billion USD).
Samsung Electronics had recorded below 4.6 billion USD for the first time in 3 years last year 3rd quarter, but recovered above 4.6 billion USD right after in the 4th quarter. After recording 5.4 billion USD this quarter, the record is on the rise once more. The business profit is considered ‘earning surprise’ by the stock firms.
The industry sees 2nd quarter as another turning point because the semiconductor business is going well and release of Samsung’s flagship smartphone 117 and new Galaxy 6 will have positive impact on the record. Stock firms presumes Samsung’s 2nd quarter business profit will be 6.2 billion USD. Some others have presumed somewhere around 7.5 Billion USD.
One of the related official said, “Last year when Samsung’s records have been stagnant, industry overall was daunted and many other related equipment and part businesses’ records dropped as well. Samsung Electronics’ recovery in the beginning of the year means green light for the whole domestic economy.”
◇Semiconductor, Factor in Reviving the Records
Device Solution (DS) department sales recorded 10 billion USD for semiconductor and 6.4 billion USD for display. The business profit for semiconductor has gone over 2.7 billion USD for the first time and display also had positive expectations for record around 410 million USD.
Increased demand in DRam market, Exynos Application Processor (AP) according to 14 Nano FinFET processing, and Foundry business expansion have factors for such improvement. Semiconductor business profit recorded 2.5 billion USD in the 4th quarter of last year and they’re most likely to surpass 2.7 billion USD in this 1st quarter. D Ram and NAND flash’s gradual growth has helped memory dept.’s business profit to surpass 2.7 billion USD.
Even though display is in the off season, thanks to the new smartphone 117 effect, it has maintained its 412 million USD business profit. LCD panel price did not drop and increase in operation rate for OLED 176 did not let off season factor affect.
◇Focus on Galaxy S6 Effect
IT·Mobile(IM)’s 1st quarter business profit is estimated to be about 2.2 billion USD. It is not even half of last year’s 1st quarter (5.9 billion USD). Nevertheless, after hitting the lowest point last third quarter (1.6 billion USD), the profit increased continuously during the next two quarters and eventually reaching above 1.8 billion USD.
Last 4th quarter business profit (1.8 billion USD) increase affected reducing the marketing cost and increase in currency resulted in increasing the average sale price (ASP). Because smartphone sales amount reduced, reviving business seemed hopeless. However, even though it was off-season for 1st quarter smartphone shipment, there was 7% increase compared to previous quarter. The stock market had presumed 1st quarter Samsung smartphone shipment to be 7,900 phones.
Expectation for the 2nd quarter is overall positive. Thanks to reorganizing of stock reordering in last year’s 3rd and 4th quarter, the investment cost had been reduced. Also through Galaxy S6 release, sales and business profit, ASP all is foreseen to increase.
The stock market claims Samsung Electronics needs to be watched to see if the competitiveness for smartphone 117 is completely restored. It is because of storming of Chinese smartphones and iPhone 6’s popularity.
◇Volume Centered TV·Home Appliances, No Profit Yet
Consumer Electronics (CE) department has more room to improve their record. CE recorded barely 183 million USD in the 1st quarter. Business profit rate was around 1%.
Samsung Electronics TV and home appliances are more fitting into external expansion rather than making profit. Samsung Electronics is going after premium market with the SUHD TV. Competitive market structure and insufficient panel supply are reasons why TV business is not making much profit yet.
