Samsung today released the financial results for the first quarter that ended on March 31, 2015 (Q1 2015). Samsung’s revenue slid further, which stood at 47.12 trillion won, an 11 percent decrease quarter-on-quarter (QOQ) whereas the operating profit for the quarter increased slightly by 690 billion won to 5.98 trillion won (QOQ).
Samsung’s Mobile business saw some growth due to improved sales of entry-level and mid-range handsets but failed to make a big impact on the financial result. The Memory Business as well as Display Panel segment saw profit growth
Samsung expects the earnings to improve on Q2 2015 compared to this quarter with improved demand for semiconductors, OLED and LCD panel sales, mobile phone sales, air conditioner sales and SUHD TV sales.
Samsung spent 7.2 trillion won towards CAPEX in Q1 2015 and expects it to be same or increase compared to 2014.
Semiconductors:
Semiconductors division posted a consolidated revenue of 10.27 trillion won along with an operating profit of 2.93 trillion won for the quarter.
Samsung says although Q1 is generally a low season for DRAM, the demand remained high due to flagship smartphone launches like the Galaxy S6 and server demand for data centers. NAND products also saw good demand.
Meanwhile, System LSI business reported decreased revenues due to seasonality but saw an increase in profitability due to production of 14nm application processors.
For Q2 2015, Samsung expects the profitability for semiconductors to improve, thanks to sales of Galaxy S6 series, chip demand for servers and enterprise SSD adoption.
Display Panel:
The Display Panel division posted 6.85 trillion won in consolidated revenue and 520 billion won in operating profit for the quarter. Samsung recorded profitability of LCD panels due to premium TV panels as well as OLED panels for its new high-end smartphone.
In Q2 2015, Samsung reckons earnings for LCD panels are expected to remain good but won’t see much improvement on the OLED panels due to the costs associated with starting a new A3 production line.
IT & Mobile Communications:
The IT & Mobile Communications division recorded a revenue of 25.89 trillion won and 2.74 trillion won in operating profit.
The quarter saw an increase of smartphone sales but tablet and feature phones sales suffered along with a decrease in ASP (average selling price). The profitability improved but at the expense of cutting down marketing expenditure.
For Q2 2015, Samsung expects the market demand for phones and tablets to be the same next quarter as well.
Consumer Electronics:
The CE division consists of Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health and Medical Equipment (HME) businesses and cumulatively, the division recorded 10.26 trillion won in consolidated revenue and a loss of 140 billion won.
Demand and profitability for flat panel TVs decreased due to seasonality and reducing foreign exchange rates in Europe, Russia and Brazil along with increase in material costs due to strong US dollar. The DA business also saw improved earnings year-on-year (YoY) due to increased sales of premium products such as the Chef Collection.
In the second quarter, flat TV demand is expected to remain same but the growth of UHD TV is expected to continue.
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