Samsung Electronics Says Its Earnings Rose By About 44 Percent

South Korean brand Samsung announced on Wednesday that its first quarter earnings rose by about 44 percent. This surge, as experts say, can be attributed to Samsung’s brisk sales of Television sets and smartphones which fared better the sales of its chip after a storm halted U.S. output. The company’s operating profit for January to March was 9.3 trillion Won which is equivalent to $8.32 billion and matches the weighted average analyst forecast from Refinitiv SmartEstimate.

According to analysts at research provider; Counterpoint, the South Korean giant company’s operating profit likely soared more than 1 trillion Won to about 4.15 trillion Won after its Galaxy S21 series flagship outsold the previous version by a margin of two-to-one in the six weeks since its January launch. Counterpoint attributes the success in Samsung mobile sales to a lower starting price for the S21 flagship; the S21 was priced $200 lower than the S20 flagship.

Samsung’s profits in its Television set and generally, home appliances business also more than doubled to about 1 trillion Won. Analyst said that the rise in sales in home appliances was as a result of the coronavirus and the lockdowns that kept people at home. The coronavirus pandemic and the ensuing lockdowns actually boosted sales of some business. LG, another big brand for Television sets and home appliances reported its largest-ever preliminary quarterly operating profit of 1.5 trillion Won for January to March.

Analysts say that Samsung’s profit in its chip business likely fell by around 20 percent to 3.6 trillion Won. This can be blamed on the cost of ramping up domestic production as well as the losses the company incurred at its Texas plant after it was brought to a halt in mid February. Samsung could therefore not leverage the strong demand at that time.

The prices of chips used in laptops and other computing devices grew by 5.3 percent between January and March when compared to the last quarter, according to TrendForce data. Analyst say that they expect this trend to go on as the current global chip shortage will spur buyers to snap up supplies. According to Park Sung-soon; an analyst at Cape Investment and Securities, “prices are likely to rise in the current quarter due to solid demand for servers”.