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Samsung’s quarter was not as bad as expected
Samsung announced its guidance for Q1 2015, and, while profits have fallen year-over-year, the decline was not as bad as analysts expected.
Samsung estimates to make around 5.9 trillion won ($5.4 billion) in profit in the January-March 2015 period, with revenue of around 47 trillion won ($43 billion). That’s compared to profits of 5.29 trillion won in Q4 2014, and 8.49 trillion won in the same period from a year ago.
Final results for Q1 2015 are expected at the end of April.
Samsung managed to beat the profits from Q4 2014, even if in the electronics industry Q1 is typically slower than the holiday quarter before it. This good news is overshadowed by the massive yearly drop of 30.5 percent, Samsung’s sixth straight year-on-year drop. But even here there’s a silver lining, as the profits decline seems to be slowing down – in Q4 2014, YoY decline was 36 percent, while in Q3 2014 it was 60 percent.
While profit is still declining, Samsung soundly beat analyst estimates
While profit is still declining, Samsung soundly beat estimates of analysts polled by Reuters and Dow Jones. That’s a good sign, at a time when stockholders and analysts are increasingly optimistic about Samsung, thanks to the good reception of the Galaxy S6.
The main profit driver for Samsung in Q1 2015 is believed to be its component business, buoyed by good market performance of memory and SoC chips. The Exynos 7420 chip used exclusively in the Galaxy S6 and S6 Edge has helped Samsung keep more profits in-house.
The situation should further improve from this quarter, especially if the 50 million units analyst estimate for the Galaxy S6 turns out to be accurate. Samsung may have a way to go to return to growth, but after a dismal 2014, signs are increasingly positive.