SamMobile has affiliate and sponsored partnerships. If you buy something through one of these links, we may earn a commission. Learn more.

Robust chip sales help Samsung’s Q1 2020 profits rise despite COVID-19 crisis

Business
By 

Last updated: April 7th, 2020 at 05:59 UTC+02:00

Samsung has announced its earnings guidance for the first quarter of 2020 earlier today, and the company said that its sales will rise compared to the first quarter of last year. However, the numbers won’t be quite as strong as what analysts had initially expected. Samsung’s shares were up 1.5% in South Korea after the earnings guidance was made public.

According to the company’s press release, Samsung expects consolidated sales of KRW 55 trillion ($44.9 billion) and an operating profit of KRW 6.4 trillion ($5.2 billion). The profits are up 2.73 percent compared to the numbers from Q1 2019. While the company’s latest earnings are higher compared to the first quarter of last year, analysts had predicted slightly higher numbers than Samsung’s own estimates.

Last year, the South Korean firm reported sales of KRW 52.39 trillion ($42.8 billion) and an operating profit of KRW 6.23 trillion ($5.1 billion). Samsung reported an operating margin of just 11.6 percent for the latest quarter, which is lowest since the third quarter of 2016. The company is expected to have shipped just 60 million smartphones in Q1 2020 compared to 72 million in Q1 2019.

Strong chip sales cushioned the smartphone sales drop

The Galaxy S20 series has been selling quite poorly. Samsung had predicted last month that its revenues from smartphones and consumer electronics would take a hit due to the COVID-19 situation. However, the South Korean company said that it expected the demand from data centers to make up for the losses in the consumer electronics business.

While Samsung didn’t reveal the breakdown of its earnings, more than KRW 4 trillion ($3.27 billion) of the company’s operating profit is said to have come from the chips business. More people have started working from home during the lockdown period, which led to the rise in demand from data centers that support team collaboration software, video conferencing tools, and video streaming services.

The company’s mobile business is bracing for a bigger hit in Q2 2020 as consumers hold off making big-ticket purchases after looking at the grim economic situation worldwide. Samsung was initially expected to sell 300 million smartphones, but analysts have cut the estimates to 260 million.

Samsung Q1 2020 Earnings Guidance Revenue Profits Estimates

Business Samsung Electronics
Load 0 comments

You might also like

Samsung seeks support from Vietnam for its Busan World Expo 2030 bid

Last week, Samsung’s TM Roh and the Prime Minister of Vietnam met to discuss the Korean tech giant’s plans for a new R&D center in Hanoi and the local manufacturing of chip transistors by mid-2023. As it turns out, there was another reason behind Samsung’s recent visit to Vietnam. Samsung seeks support for the 2030 […]

  • By Mihai Matei
  • 2 days ago

Samsung to bolster R&D and chip manufacturing in Vietnam by mid-2023

Samsung is in the process of building a strong international supplier network and increasing its manufacturing presence in more countries. The company is constructing a new manufacturing plant in the United States, and earlier this week, Samsung’s TM Roh met with the Prime Minister of Vietnam, Pham Minh Chinh, to prepare for what’s coming next. […]

  • By Mihai Matei
  • 5 days ago

Samsung remains the 2nd-largest tablet vendor in a declining market

The smartphone market isn’t the only one affected by the ongoing economic troubles. PC and tablets have just recorded their second quarterly decline, with global shipments falling 14% in Q2 2022. Samsung maintained its market position behind Apple. Several causes have led to declining PC and tablet shipments in Q2 2022, such as lower consumer […]

  • By Mihai Matei
  • 6 days ago

BREAKING: Samsung scaling down smartphone production due to weak sales

The consumer spending spree witnessed after the COVID-19 pandemic lockdowns appears to be over now. Financial experts around the world forecast a global recession, and the smartphone market has started to brace for the economic downturn. Even Samsung seems to have scaled back smartphone production. Although Samsung claimed that it expects smartphone sales to stay […]

  • By Asif Iqbal Shaik
  • 6 days ago

Spotify Connect stops working on Samsung soundbar due to licensing

It’s a sad state of affairs when perfectly-working hardware stops functioning as intended due to software and lack of support. Without Android OS and One UI, Samsung’s Galaxy S22 would become a paperweight. Of course, the Galaxy S22 is an extreme example, as it will never lose Android and One UI. But other Samsung products […]

  • By Mihai Matei
  • 1 week ago

Investors worry Samsung’s chip division has lost its ability to innovate

Market watchers and investors are worried that Samsung Electronics is losing its grip on the semiconductor market. More so, Samsung is reportedly losing ground due to internal issues rather than external factors driven by the competition. Critics worry that the Korean tech giant, particularly its chipset division, has lost its ability to innovate under Lee […]

  • By Mihai Matei
  • 1 week ago