Samsung’s first-quarter earnings top estimates on robust demand for memory chips, smartphones

Samsung Electronics reported preliminary earnings for the first quarter that beat analysts’ estimates on robust demand for new smartphone models and memory chips that go into servers.

Operating profit increased 50 per cent to 14.1 trillion won (US$11.6 billion) for the three months ended March, South Korea’s biggest company said on Thursday in a statement. Analysts estimated 13.4 trillion won on average.

Sales advanced 18 per cent to 77 trillion won, also higher than expected. Samsung will provide net income and divisional performance when it reports full earnings on April 28.

Samsung is the first major technology company to report numbers for the first quarter, a period disrupted by war in Ukraine, sanctions on Russia and resurgent Covid-19 infections in China. Still, data centre expansions and the global shift to 5G mobile communications continue to spur demand for semiconductors that account for a large chunk of the conglomerate’s profit.

“We expect solid earnings growth in 2022 on the back of healthy earnings rebound in semiconductor and display in the second half of 2022,” Peter Lee, an analyst at Citigroup, said in a note ahead of the results. “Specifically, we expect Samsung’s memory business to benefit from the memory pricing strength throughout the second half of 2022.”

In smartphones, another Samsung growth pillar, cumulative sales of the Galaxy S22 series are likely to exceed one million units in South Korea this week, the company said.

The new flagship line-up, which made its debut in February, is selling at a 20 per cent faster clip than the previous S21 series, according to the Suwon-based firm. In the US, the S22 sold 60 per cent more than the S21 in its first three weeks on the market, according to research firm Counterpoint.