Samsung today reported its financial result for the first quarter that ended on March 31, 2016. Samsung recorded a revenue of 49.78 trillion won, which is an increase of 5.7 percent year-on-year (YoY) whereas operating profit stood at 6.68 trillion won, an increase of 12 percent YoY.
Samsung says the increase in earnings is a result of the “early launch and successful sales” of their Galaxy S7 and Galaxy S7 edge devices, better memory product mix, better OLED panel sales and improved supply of its 14nm chips.
Here’s a breakdown of individual businesses.
Semiconductors:
The semiconductors business that comprises of Memory and System LSI divisions posted consolidated revenue of 11.15 trillion won and an operating profit of 2.63 trillion won.
The memory division saw some good sales despite a weak seasonality during the quarter whereas the System LSI business recorded solid earnings through a good product mix.
In Q2, Samsung expects to a steady demand for products. They even expect to begin mass production of 10nm products later this year.
Display Panel:
The Display Panel division posted a revenue of 6.04 trillion won and an operating profit of 0.27 trillion won. The LCD panels saw a decrease in the shipment due to weak demand and low seasonality but OLED panels shined through the quarter, thanks to the demand of high-end smartphone panels and smartphones.
Samsung expects to expand its customer base for OLED panels and improve profitability for LCD panels by increasing shipments for premium products like its UHD panels.
IT & Mobile Communications:
The IT & Mobile Communications division registered a consolidated revenue of 27.60 trillion won and 3.89 trillion won in consolidated operating profit. This is a 6.6 percent an 42 percent increase YoY respectively.
Samsung says despite the decrease in demand of phones and tablets, the overall profit increased due to the sales of Galaxy S7 and Galaxy S7 edge.
As for the next quarter, the demand for smartphone and tablets is expected to be weak due to seasonality but Samsung helps to maintain the growth through increased shipment of mid-to-low-end Galaxy A and Galaxy J series.
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 posted consolidated revenue of 10.62 trillion won and a profit of 0.51 trillion won.
The VD earnings improved YoY, thanks to sales of premium UHD TVs and Curved TVs but the TV market demand decreased due to weak seasonality and economic downturn in emerging markets.
The DA business also showed some growth due to sales of premium products like Chef Collection refrigerators and Activewash washing machine.
The VD biz is expected to show some growth in TV demand due to Olympics with some growth in the digital appliance demand.
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