(ATF) Samsung Electronics has reported an expected 44% rise in first-quarter profit on strong sales of smartphones and home appliances.
The South Korean giant’s upbeat earnings forecast came a day after rival LG Electronics announced it would quit the smartphone business.
Operating profit reached 9.3 trillion won ($8.2 billion) in the January-March quarter, the company’s highest first quarter result since 2018 and in line with market estimates.
Sales increased 17.5% to 65 trillion won, according to the company’s preliminary estimates.
The company’s shares fell as much as 0.6% to 85,500 won in early trading in Seoul on Wednesday before paring back some losses.
Analysts say the the company has had a particular boost from rolling out its Galaxy S21 series of flagship smartphones in January, more than a month ahead of its usual annual launch schedule.
While the early launch boosted sales, analysts have doubts over Samsung’s ability to move its smartphone technology forward in a meaningful way.
“The new Galaxy S21 range follows the formulaic approach to annual upgrades that all phone makers are now locked into,” said Ben Wood, chief of research at consultancy CCS Insight. “I think the biggest differentiator is the decision to announce these products earlier than usual.”
Wood said Samsung faces fierce competition from ambitious Chinese rivals, such as Huawei and Xiaomi, while Apple’s iPhone franchise continues to go from strength to strength.
“Samsung needs these flagship products to stand out from the crowd in a tough competitive and macro-economic climate,” he added.
With people spending more time at home during the coronavirus pandemic, sales of premium television sets and other high-margin consumer electronics also jumped.
But a winter Texas storm hit output at the company’s semiconductor division. Samsung said operations have returned to near normal but losses totalled as much as 400-billion won.