Samsung Posts Increased First Quarter Results Despite Weakened Smartphone Market
Published on: 29th Apr 2014
By: Ian Mansfield
Samsung Electronics has reported a modest rise in its first quarter revenues but that masked a 4 percent fall in its mobile phone division.
The company posted revenues of KRW53.7 trillion, and a USD500 million increase in profits of KRW7.57 trillion (USD7.5 billion).
Capital expenditure in the first quarter was 5.4 trillion won, which includes 3.3 trillion won for the memory business and 700 billion won for display.
Although market demand for both smartphones and tablets decreased during the first quarter, operating profits for the division jumped 18 percent compared with the previous quarter thanks to steady smartphone shipments and a positive impact from adjustments of one-off expenses.
Samsung said that it expects to see profits rally in the second quarter and beyond, on the back of improved sales of display panels and home appliances. Orders for display panels that are used for premium smartphones and TVs are expected to increase, as new mobile devices are rolled out into the market and as consumers look forward to the upcoming World Cup in Brazil.
The company also expects that the outlook for household appliances will also pick up on seasonal demand for air conditioners, as well as orders for high-end TVs based on the World Cup effect.
"While developed markets are expected to lead global economic recovery, macroeconomic uncertainties, such as currency fluctuation in emerging markets due to QE tapering in the US, are expected to continue in 2014," said Robert Yi, Senior Vice President and Head of Investor Relations. He said, however, "we expect our overall earnings to improve starting from the second quarter, driven by improvements in the Display Panel segment and the Consumer Electronics division in conjunction with steady growth momentum in mobile and memory businesses."