SEOUL (Reuters) – Samsung Electronics Co Ltd (005930.KS) said on Tuesday its first-quarter operating profit likely rose 3% from a year earlier, slightly beating analysts’ forecasts as chip sales helped cushion the blow from the coronavirus pandemic on smartphones and TVs.
FILE PHOTO: The logo of Samsung Electronics is seen at its store in Seoul, South Korea, October 11, 2017. REUTERS/Kim Hong-Ji
Samsung said operating profit was expected to be 6.4 trillion won ($5.2 billion) in the quarter ended March, compared with 6.2 trillion won a year ago and the 6.2 trillion won estimate from analysts according to Refinitiv SmartEstimate.
Revenue likely rose 5% to 55 trillion won from a year ago, in line with the 55.6 trillion won estimate.
Samsung Electronics said in March the coronavirus pandemic would hurt sales of smartphones and consumer electronics this year, while demand from data centers would fuel a recovery in memory chip markets.
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The novel coronavirus which emerged from China last year triggered a 38% year-on-year fall in global smartphone shipments to 61.9 million units in February, according to research firm Strategy Analytics.
While the smartphone business is taking a beating, there is an upside for Samsung Electronics from the pandemic.
Analysts say the company’s memory chip business, which generated more than 50% of its operating profit in 2019, would likely report better-than-expected results in the first quarter.
Memory chip prices are rising as work-from-home requirements boost demand from the data centres that support internet services such as streaming and cloud computing, analysts have said.
Prices for DRAM memory chips are up more than 3.5% since January, according to industry tracker DRAMeXchange.
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Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Stephen Coates