Samsung make $6.4 Billion Net Profit in Q1

hodg100

Distinguished Member
Strong Galaxy sales underpin Company's fortunes

Samsung has announced it's quarterly earning for the first period of 2013 and it looks to be mostly good news for the World's biggest CE company.

The Koreans announced revenues of 52.87 trillion won (US$47.5 billion) while consolidated operating profit for the quarter reached 8.78 trillion won (US$7.9 billion), representing a 1-percent decline (QoQ), while consolidated net profit for the same quarter was 7.15 trillion won (US$6.4 billion). So, yeah, big numbers.

Highlighting the quarterly performance, the IT & Mobile Communications (IM) Division which comprises the Mobile Communications, Networks, and Digital Imaging businesses, achieved profitable results backed by strong smartphone sales coupled with reduced marketing expenses.

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Strong sales of GALAXY S III and GALAXY Note II devices aided profit margins for Mobile Communications, but in the second quarter global demand for smartphones is forecast by Samsung to slow down, compounded by heightened competition.

Demand for consumer electronics products in emerging markets stemmed further sales losses but weak seasonality and a sluggish economy took their toll on Samsung's sales of TVs and home appliances.

"Although market uncertainties from the European crisis and the slow global economic recovery are still lingering, we expect to increase R&D spending for strengthening our competitiveness ahead of planned new product launches," said Robert Yi, Senior Vice President and Head of Investor Relations.

Mr. Yi cautioned, however, "We may experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market while TV growth will continue to wane in developed markets."

For the first quarter of 2013, overall panel demand subsided as the global economic slowdown affected consumer spending. Samsung saw the average selling price of LCD panels decline in the upper single-digit percentage range. Overall however, the company was able to deliver solid results with sales in high value-added products, such as panels for tablets and OLED panels for smartphones, delivering growth.

Looking ahead to the second half, Samsung anticipates panel demand to recover in line with the approach of higher seasonal demand and the launch of new products. For TV panels, demand is likely to rise toward the end of the second quarter and the company will focus its energies on enhancing its premium product portfolio, including large-size TV panels over 60 inches in size.

The Consumer Electronics Division - encompassing the Visual Display, Digital Appliances, Printing Solutions and Health and Medical Equipment businesses - posted an operating profit of 230 billion won for the quarter on revenues of 11.24 trillion won. The Visual Display business accounted for 7.43 trillion won of earnings.

Seasonally low demand for consumer electronics goods during the first quarter corresponded with the Division's overall sales retreating by 23 percent on-quarter. In the TV market, demand was down in a quarter-on-quarter comparison but improved year-on-year as emerging markets maintained growth. Amid these challenges, Samsung continued to expand sales of its premium TV lineup, including region-specific LED models, and saw shipments of its premium ES7000/8000 series gain 25 percent on-year.

Samsung's response in developed markets will be on extending sales of differentiated Smart TVs and launching premium UHD TVs. In emerging economies, the company will strengthen the competitive advantages of its customized LED TV products and respond to growing demand for premium models.
 

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