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Samsung predicts strong Q1 '16 profit, driven by Galaxy S7 sales

Samsung Electronics has issued its Q1 2016 earning guidance, predicting a 4 percent growth in revenue and 10 percent boost to quarterly profits.

Published onApril 7, 2016

Samsung Galaxy S7 and S7 Edge Tips and tricks-4

Samsung Electronics has announced its first quarterly earnings guidance for 2016 and there’s a sense of optimism, particularly about smartphones, that has been lacking around previous statements. In total, Samsung is forecasting an operating profit of approximately 6.6 trillion won ($5.7 billion) for Q1 2016, a 10.4% increase from the 5.98 trillion won a year earlier.

Importantly, Samsung is predicting that it will exceed industry forecasts about its performance. Revenue is set to increase by approximately 4 percent year over year, resulting in 49 trillion won ($42.3 billion) worth of sales, up from from 47.1 trillion won in Q1 2015. All of that being said, Samsung’s operating profit will still be down some 22 percent from its heyday of high smartphone sales back in Q1 2014.

Samsung doesn’t offer anything in the way of a division breakdown with its earnings guidance, but industry analysts have been steadily increasing their expectations for the company’s smartphone sales since the launch of the Galaxy S7 and S7 Edge. The tech giant’s latest flagship handsets have certainly received plenty of praise and observers have noted a huge boost to early sales in some countries when compared with last year’s flagship.

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Analysts expect that combined sales of the Galaxy S7 and S7 Edge could reach 10 million units in the first quarter, which is about 30 to 40 percent higher than initial forecasts. Additionally, it is expected that strong mobile sales will make up for a revenue dip in Samsung’s highly profitable semiconductor division.

Samsung’s final Q1 2016 figures will be announced later this month, complete with additional details. Perhaps 2016 is the turnaround year that the company’s mobile division has been waiting for. However, making this early success stick is another matter entirely.

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