SEOUL, April 29 (Xinhua) — Samsung Electronics, South Korea’s tech giant, posted a double-digit growth in the first-quarter earnings owing to pent-up demand for smartphone, TV and home appliances, the company said Thursday.
Operating profit amounted to 9.38 trillion won (8.5 billion U.S. dollars) in the January-March quarter, up 45.5 percent from a year earlier. It beat market expectations of about 9 trillion won (8.1 billion U.S. dollars).
Revenue advanced 18.2 percent to 65.39 trillion won (59 billion U.S. dollars), marking the biggest first-quarter figure in the company’s history.
Net income surged 46.2 percent over the year to 7.14 trillion won (6.4 billion U.S. dollars) in the first quarter.
The double-digit increase came as pent-up demand emerged for mobile devices and electronic products, shrugging off the economic downturn from the COVID-19 pandemic and showing signs of global demand recovery.
The IT & mobile communications division, which makes smartphones, logged an operating profit of 4.39 trillion won (4 billion U.S. dollars) on revenue of 29.21 trillion won (26.4 billion U.S. dollars).
Demand for Samsung smartphones recovered in the first quarter from a year earlier when the global market was significantly impacted by the COVID-19 outbreak. Smartphone sales were also underpinned by the launch of flagship Galaxy S21 and mass-market models such as Galaxy A-Series.
Samsung forecast that market demand would recover to a pre-pandemic level in the second half on the back of a gradual economic recovery and a continued expansion of the 5G market.
The consumer electronics unit, which produces TV and household appliances, recorded an operating profit of 1.12 trillion won (1 billion U.S. dollars) on revenue of 12.99 trillion won (11.7 billion U.S. dollars). Both profit and revenue were the highest first-quarter readings logged by Samsung.
TV demand increased in the first quarter on a yearly basis due to a sustained demand in advanced markets.
Samsung expected the TV demand to grow in the second quarter owing to major sports events, including the UEFA Euro 2020 and the Summer Olympics, saying a switch of demand from home entertainment to outdoor activities in the second half is expected as more countries reach herd immunity, resulting in weaker TV demand.
The display panel business registered an operating profit of 360 billion won (325 million U.S. dollars) on revenue of 6.92 trillion won (6.2 billion U.S. dollars) for the first quarter.
The mobile display earnings fell on a quarterly basis because of chip shortages affecting major smartphone makers, but the earnings improved on a yearly basis backed by an expanded adoption of organic light-emitting diode (OLED) display panels from flagship to entry-level models.
The semiconductor unit recorded an operating profit of 3.37 trillion won (3 billion U.S. dollars) on revenue of 19.01 trillion won (17.2 billion U.S. dollars).
The memory chip business saw a slight profit decline due to a downward trend in NAND prices and the initial costs to ramp up new production lines that offset decent demand for server and mobile chips.
Earnings for the system LSI business remained mostly flat in the first quarter compared to the previous quarter due to the impact of mobile display driver IC (DDI) supply issues, caused by foundry production disruption.
The foundry business saw a fall in earnings owing to a production disruption at the Austin fab in the United States from a major power outage.
Samsung’s capital expenditure in the first quarter came in at 9.7 trillion won (8.8 billion U.S. dollars), including 8.5 trillion won (7.7 billion U.S. dollars) spent on chips and 700 billion won (632 million U.S. dollars) on display panels each.