Samsung Electronics announced financial results for the first quarter ended March 31, 2016.
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Samsung’s revenue for the quarter was KRW 49.78 trillion, an increase of 5.7 percent YoY, while operating profit for the quarter was KRW 6.68 trillion, an increase of 12 percent YoY.
In the company’s earnings guidance disclosed on April 7, 2016, Samsung estimated first quarter consolidated revenues would reach approximately KRW 49.0 trillion with consolidated operating profit of approximately KRW 6.6 trillion.
The first quarter saw overall earnings growth led by the early launch and successful sales of the flagship Galaxy S7 and S7 edge, improved memory product mix, expanded 14nm supply of System LSI products and increased sales of OLED panels.
For the Semiconductor business, despite weak memory demand due to seasonality, the Memory Business achieved solid earnings by expanding sales of high value-added products, while continuously reducing costs through technology migrations for DRAM and NAND.
Earnings for the Systems LSI Business increased YoY led by increased demand for 14nm products while QoQ earnings decreased.
Overall earnings of the Display Panel business decreased due to a sharp decline in LCD panel earnings although earnings of OLED panels improved mainly driven by the Galaxy S7. The LCD business experienced temporary yield issues while adopting new process technology as well as TV panel price decline.
The IT & Mobile Communications (IM) Division saw a substantial earnings improvement both YoY and QoQ mainly driven by the early launch of Galaxy S7 and its strong sales and improved cost efficiency through the streamlining of mid-to-low-end smartphone lineups.
Although the company had a one-time royalty settlement expense in the quarter, the impact on operating profit was equivalent to less than 1 percent of IM revenue.
The Consumer Electronics (CE) Division achieved significant earnings growth YoY led by expanded sales of premium TV models such as SUHD TV and Curved TV in developed markets, and also a notable sales increase of premium home appliance products in North America.
The company estimated that the weaker Korean won against major currencies in the first quarter positively impacted operating profit by approximately KRW 0.4 trillion, reflected mainly in the component business earnings. ■