Samsung’s first-quarter earnings slightly above expectations

The Galaxy S3 and the larger Galaxy Note 2 smartphones boost sales.

New Statesman
The Samsung Galaxy S IV smartphone. Credit: Getty Images.

Samsung Electronics has reported revenue of 52.87tn South Korean Won for the first-quarter ended 31 March 2013, a year-on-year growth of 17 per cent and a decline of 6 per cent from the previous quarter.

Operating profit was 8.78tn South Korean Won, a 54 per cent year-on-year increase, and a decline from 8.84tn South Korean Won in the previous quarter.

The South Korean electronics giant posted its first quarterly operating profit decline in two years, despite improvement of earnings in its mobile and IT division.

The results highlight Samsung’s growing reliance on its successful mobile device business, overwhelmingly the biggest component of its IT and mobile division, which accounted for nearly three quarters of operating profit in the quarter, reported the Financial Times.

The company, which is all set to launch its flagship smartphone Galaxy S4 this weekend, said its sales were in the quarter were boosted by the Galaxy S3 smartphone and the larger Galaxy Note 2.

Samsung, however, admitted difficulties in meeting overwhelming global demand for the Galaxy S4 smartphone, and denies any problems associated with securing components.

Despite its heavy spending on marketing, Samsung expects sales to remain flat in the second-quarter but to pick up in the second half of 2013.

Robert Yi, Samsung’s head of investor relations, said: “We may experience stiffer competition in the mobile business due to [the] expansion of the mid- to low-end smartphone market.”

Division wise, sales of D-Ram memory chips were affected by a weak personal computer market. Operating profit in the consumer electronics division declined by more than half year-on-year to 230bn South Korean Won.

The company expects demand for premium televisions in the emerging markets.

Samsung shares fell by 0.6 per cent in morning trading.