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Samsung expects huge Q1 profit - and it's not due to S9 (Updated)

Update: Samsung has revealed its official earnings guidance for Q1 2018, and it's even higher than the initial report.

Published onApril 5, 2018

Samsung Galaxy S9

Update (04/06/2018 at 7:30 A.M.): Samsung has revealed its earnings guidance for Q1 2018, and it looks slightly higher than the initial report. The firm announced projected operating profits of 15.6 trillion won ($14.5-billion). By comparison, Q1 2017 saw the company rake in profits of 9.9 trillion won ($9.2-billion).

Original article: Samsung is expected to forecast a massive jump in profits for the first quarter — and it’s not quite due to the Galaxy S9.

The firm could be set for a profit increase of almost 50% in this period, Reuters reports, owing to an “unprecedented rally” in the global memory chip market. In fact, Samsung’s semiconductor business is expected to account for almost three-quarters of the $13.7-billion in anticipated profit.

“Although memory chip price growth is expected to slow down from last year’s boom, increased shipments and cost-cutting will fuel further profit growth in Samsung’s semiconductor business and lift profits to another record year,” Yuanta Securities Korea analyst Lee Jae-yun told the outlet.

The Galaxy S9 is expected to contribute 40% of the revenue during this quarter, it was reported, having shipped 9.6 million units.

LG and rivals

Meanwhile, Samsung arch-rival LG is expected to record Q1 profits of $678-million, Yonhap News reported. LG’s performance is attributed to its TV and appliance units.

The news further illustrates the importance of mobile brands diversifying their revenue streams. Other noteworthy examples include Apple and its services division, Sony and its PlayStation and image sensor businesses, and Huawei‘s network infrastructure operation.

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More recently, we’ve also seen HTCbranch out into virtual reality with the Vive range of headsets, as its mobile woes continue.

Diving into the smartphone component space isn’t always a sure bet, though. Reuters notes concerns of a “slowdown” in smartphone sales and lower-than-expected iPhone X sales, hitting Samsung share prices. Samsung manufacturers the OLED panels used in Apple’s top-end smartphone.

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