Samsung today published their Q1 2017 results that ended on March 31, 2017. Samsung recorded a revenue of 50.55 trillion won, a growth of 0.77 trillion won YoY with an operating profit of 9.90 trillion won, an increase of 3.22 trillion won YoY.
The quarter’s profit surge was a result of the components business, specifically the semiconductors and display panel. The memory, System LSI and display panel business experienced improved earnings due to better demand and favourable ASP whereas the smartphone business earnings decreased QoQ due to price adjustment of Galaxy S7.
For Q2 and rest of the year, Samsung expects a rise in profit due to good demand for memory and display panels and rollout of its flagship devices like the Galaxy S8 and Galaxy S8+.
Total capital expenditure (CAPEX) in the first quarter was 9.8 trillion won, which includes 5 trillion won for the semiconductor business and 4.2 trillion won for the display segment.
Here’s a breakdown of individual businesses.
Semiconductors:
The semiconductors business that comprises of Memory and System LSI divisions posted consolidated revenue of 15.66 trillion won and an operating profit of 6.31 trillion won.
The memory division saw a strong quarter due to the growth in demand for memory chips in the high-performance high-density mobile and server products. The System LSI business also posted improved earnings due to demand for its 14nm APs, mid-to-low end SoCs and image sensors.
In the second quarter, Samsung expects strong demand for SSDs and DRAMs with the System LSI business expanding the 14nm chips to other industries and focusing the 10nm APs to mobile devices.
Display Panel:
The Display Panel division recorded a revenue of 7.29 trillion won and an operating profit of 1.30 trillion won due to strong demand and increased shipment of OLED panels whereas increased sales of high-resolution LCD TV panels.
Samsung expects the OLED and large-sized UHD LCD panels demand to remain strong will see improvement with the uptake of large-sized UHD panels.
IT & Mobile Communications:
The IT & Mobile Communications comprising the Mobile Communications and Networks Businesses recorded an operating profit 2.07 trillion won on a consolidated revenue of 23.50 trillion won.
The IM division’s profitability decreased due to the price adjustment of the Galaxy S7 and the Galaxy S7 edge but saw an increase in shipment due to the launch of mid-range devices like the Galaxy A series.
Samsung expects the Galaxy S8 and Galaxy S8+ will bolster their upcoming quarter despite the overall demand remaining flat.
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 10.34 trillion won and a profit of 0.38 trillion won.
The profit declined YoY due to increased panel prices and currency fluctuations as well as lower demand from European and Latin American markets.
The DA business improved its sales YoY due to sales of premium products like Chef Collection refrigerators and Activewash washing machines.
Looking ahead, Samsung expects the division to improve its performance with a mix of new products, seasonality and partnerships solid performance for the division.
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