Best buy guide: Galaxy Watch 6 or Galaxy S24+. Woo-hoo join SamMobile on WhatsApp or Telegram!

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

Notifications
    News for you

    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

    You might also like

    Samsung may reveal its $44 billion US chip investment next week

    Samsung may reveal its $44 billion US chip investment next week

    Samsung has invested a lot of money in its US chipmaking facilities. In addition to its existing facility, the company announced a $17 billion project in 2021 for a semiconductor plant in Taylor, Texas that's likely to begin mass production of chips later this year. The US government is focused on pumping up the local […]

    • By Adnan Farooqui
    • 1 day ago
    Samsung’s top acquisitions man returns as big deals expected

    Samsung’s top acquisitions man returns as big deals expected

    Samsung has not participated in the mergers and acquisitions market for more than 7 years, despite having more than $60 billion in cash that it could use to buy new companies. Its absence from this space was also partly due to the legal troubles of heir Lee Jae-yong, who only recently returned to the top […]

    • By Adnan Farooqui
    • 1 day ago
    Samsung’s product naming has a grammar problem

    Samsung’s product naming has a grammar problem

    I'm a big fan of Samsung using proper nouns to label most of its home electronics. For instance, PC monitors names are no longer just a string of seemingly random letters and numbers. Instead, they belong to lineups named ‘Odyssey' or ‘ViewFinity.' It makes Samsung look better instead of coming across as a company that […]

    • By Mihai Matei
    • 2 days ago
    Samsung India announces Solve For Tomorrow 2024 innovation program for students

    Samsung India announces Solve For Tomorrow 2024 innovation program for students

    Samsung has announced the launch of the third edition of the Solve for Tomorrow program in India. The program aims to foster a culture of innovation among students. This year, the program has two tracks: School Track and Youth Track. This program is held in 63 countries globally. Over 2.3 million young people have participated […]

    • By Asif Iqbal Shaik
    • 3 days ago
    Samsung’s new Impulse app uses AI to help people with speech disorders

    Samsung’s new Impulse app uses AI to help people with speech disorders

    Samsung is now using artificial intelligence (AI) in various ways. The most prominent is Galaxy AI, a suite of AI-based tools and features that debuted with the Galaxy S24 series. But while Galaxy AI is meant to improve productivity and device customization, Samsung has also announced that it has developed Impulse — a new mobile […]

    • By Mihai Matei
    • 3 days ago
    US trade commission orders Samsung to stop unfair business practices with retailers

    US trade commission orders Samsung to stop unfair business practices with retailers

    The US FTC (Fair Trade Commission) has ordered Samsung to stop unfair business practices in the country. The antitrust regulator said that Samsung can't demand retailers to offer it retail prices for their products. The company reportedly did so for six years before it faced a probe from the agency. It was reported that Samsung […]

    • By Asif Iqbal Shaik
    • 4 days ago