Source : coinspeaker.com
Samsung reported an $11.6 billion Q1 2022 profit which exceeds market expectations and was boosted by strong demand for its new smartphones.
Samsung Electronics Co Ltd released its Q1 preliminary earnings report for 2022, which showed a nearly 50% jump in quarterly operating earnings. The South Korean electronics giant achieved its highest first-quarter profit of $11.6 billion (14.1 trillion Korean won) since 2018. This occurred on the back of strong demand supporting prices for memory chips. The numbers also beat out Refinitiv SmartEstimate’s $10.9 billion (13.3 trillion Korean won).
In addition, Samsung also stated that it expects to report consolidated revenue of $63.1 billion (77 trillion Korean won) for Q1 2022. Again, this figure is up from the first quarter a year ago, when the company realized $53.6 billion in sales. As it stands, this means that Samsung attained an 18% rise YoY in revenue.
Brisk Smartphone Sales & Disruption at Rival Chip Facility Contributed immensely to Samsung’s Favorable Q1 2022 Outlook
According to analysts, Samsung’s earnings got an additional boost from rapid smartphone sales in the quarter and a disruption at a rival NAND Flash chip plant. As a result, Samsung is looking to surpass its prior sales record of $62.8 billion (76.6 trillion Korean won).
According to S&P Market Intelligence analysts, the lingering market expectation was approximately $61.4 billion (74.9 trillion Korean won), according to S&P Market Intelligence analysts. On April 28th, Samsung will release detailed earnings for its first-quarter report.
Park Sung-Soon, an analyst at Cape Investment & Securities, buttressed the already-posited reasons for why Samsung fared well, saying:
“The guidance beat market expectations, probably due to memory chip shipments and prices being better than expected.”
Samsung (which also produces DRAM and NAND memory chips) still stayed afloat despite the recent price drop in semiconductor chips. Furthermore, the world’s largest memory chip and smartphone maker could face a further DRAM chip price plunge in Q2. Factors that may cause this fall include general inflation and the ongoing Russian-Ukraine war in Eastern Europe. Analysts suggest that the DRAM price drop will be between 0-5%, and insist that it would not hurt the company’s bottom line much.
Meanwhile, the price of NAND might rise up to 10% in the second quarter. The increase is mostly because of a disrupted NAND production caused by a raw material contamination issue at a joint venture facility. This same issue also led to an increase in Samsung smartphone prices, which partly contributed to the favorable Q1 outlook. Touching on the situation, Park explained:
“After the contamination issue at Kioxia, I think there were rush orders for NAND Flash chips made to Samsung for products that were meant to be secured from Kioxia.”
According to Samsung, Galaxy S22 Series sales will likely exceed 1 million units in South Korea by the end of this week.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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