Samsung Electronics Estimates 56% Jump In Profit

Samsung Electronics Estimates 56% Jump In Profit

Samsung Electronics Estimates 56% Jump In Profit

The new Samsung Galaxy S9 Plus mobile is shown during the Mobile World Congress in Barcelona, Spain February 27, 2018.

Korea exported more than $10 billion in semiconductors this March in its highest-ever monthly sales, thanks to steady global demand for computer chips as technologies such as artificial intelligence, big data and cloud storage advance.

Analysts are expecting similar or lower profits in the second quarter, a result of slower growth in DRAM chip prices and increased marketing costs for the Galaxy S9 handsets.

Total revenue are projected at ₩60 trillion ($56 billion), adding 18.7 percent from ₩50.55 trillion in the same quarter a year ago. Last year's S8 and S8+ helped bolster the Suwon-based manufacturer's second-quarter profits as well. Samsung did not go into detail about its performance and will release final earnings results most likely in April 26.

Samsung shares fell as much as 2.7 per cent on Friday before paring losses to fall 0.7 per cent as of 0345 GMT (11.45 p.m. ET), compared to a 0.4 per cent drop in the wider market.

Prices of NAND chips already started to lose momentum in late 2017 and analysts have been keeping a close eye on any signs that may indicate a peak in the price of DRAM.

"Memory chips are the loyal son of Samsung", said Lee Jae-yun, an analyst at Yuanta Securities. "Although gains in memory chip prices have slowed from the height of the chip boom, lower prices could also increase demand for chips, and Samsung has the cost-cutting ability to keep profits up", Greg Roh, an analyst at HMC Investment & Securities, told Reuters. According to previous reports, Samsung has 70 cents in operating profit of every $1 DRAM chips sold.

A research firm estimated 9.3 million units of Samsung flagship device were shipped in the first quarter, with analysts expecting the Galaxy S9's full-year sales performance to be like those of its predecessors.

Samsung also released its new Galaxy S9 smartphone five weeks before the S8 was released past year, which likely increased the mobile communication division's operating profit over 2017's figure. Samsung has now confirmed this in its guidance number announced today.

A Samsung spokeswoman said prosecutors had secured labor-related documents.

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