[SEOUL] Samsung Electronics reported preliminary earnings for the first quarter that beat analysts' estimates on rising demand for new smartphone models and memory chips that go into servers.

Operating profit increased to 14.1 trillion won (S$15.7 billion) for the 3 months ended March, South Korea's biggest company said Thursday (Apr 7) in a statement. Analysts estimated 13.4 trillion won on average.

Sales advanced to 77 trillion won, also higher than expected. Samsung will provide net income and divisional performance when it reports full earnings later this month.

Samsung is the first major tech company to report numbers for the first quarter, a period disrupted by war in Ukraine, sanctions on Russia and resurgent Covid-19 infections in China. Still, data centre expansions and the global shift to 5G communications continue to spur demand for semiconductors that account for a large chunk of the conglomerate's profit.

"We expect solid earnings growth in 2022 on the back of healthy earnings rebound in semiconductor and display in H2 2022," Peter Lee, an analyst at Citigroup, said in a note ahead of the results. "Specifically, we expect Samsung's memory business to benefit from the memory pricing strength throughout H2 2022."

Shares of Samsung have lost about 12.5 per cent so far this year, with the broader chip sector underperforming as rising economic risks clouded the outlook for consumer demand. Analysts have also cited relatively slow improvements in Samsung's production yields of advanced nodes for contract-based chipmaking as a downside risk for the stock.

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In smartphones, another Samsung growth pillar, cumulative sales of the Galaxy S22 series are likely to exceed 1 million units in South Korea this week, the company said.

The new flagship lineup, which made its debut in February, is selling at a 20 per cent faster clip than the previous S21 series, according to the Suwon-based firm. In the US, the S22 sold 60 per cent more than the S21 in its first 3 weeks on the market, according to research firm Counterpoint. BLOOMBERG