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Samsung forecasts best quarterly profit in over 3 yrs as chips soar
[SEOUL] South Korean tech giant Samsung Electronics Co Ltd forecast on Friday its best quarterly profit in more than three years in the January-March period, beating expectations on the back of robust demand for memory chips.
The Apple Inc rival and global memory chip leader said first-quarter operating profit was likely 9.9 trillion won (S$12.3 billion), compared with an average forecast of 9.4 trillion won from a Thomson Reuters survey of 18 analysts.
Revenue for the quarter rose 0.4 per cent to 50 trillion won, compared with analysts' forecast of 49.4 trillion won.
Samsung shares touched a record high of 2.134 million won in late March on expectations of record earnings in 2017, as limited production capacity for the memory chip industry and growing demand for more firepower from devices such as smartphones and servers push up margins.
While Samsung will not provide detailed earnings results until the end of April, analysts tipped its chip division to earn a record 5.8 trillion won and propel the firm to its best overall operating profit since the third quarter of 2013.
Favourable memory market conditions will likely persist throughout 2017 due to diminishing production gains on investments and careful capacity management among chipmakers.
The performance of Samsung's Galaxy S8 premium smartphone, which goes on sale on April 21, will be the key variable for Samsung going forward.
Some analysts already project a first-year sales record for the smartphone giant, fuelling expectations that the device will make up for the costly collapse of the fire-prone Galaxy Note 7 last year.
The company did not elaborate on its performance and will disclose detailed earnings in late April.