Galaxy Smartphones Lead Samsung To Record Q1 Profit


Samsung announced Friday the highest quarterly profit in the Korean tech giant’s history, driven primarily by strong demand for its display panels and Galaxy line of smartphones and tablets.

The company reported a record operating profit of $5.15 billion, up 98 percent year-over-year from the $2.6 billion it announced in the first quarter of last year. Samsung’s revenue for the quarter jumped to $40 billion, a 22 percent increase from last year’s $32.6 billion.

Samsung attributed its record results to growth within its IT and Mobile Communications segment, and particularly to strong sales of its flagship half-tablet, half-smartphone device the Galaxy Note and its Galaxy S II smartphone. Operating profit for its IT and Mobile Communications business reached $37.7 billion, rising a whopping 193 percent year-over-year.

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Samsung didn’t disclose exactly how many smartphones it shipped during the first quarter. But research firm IHS iSuppli published a report Thursday pegging its shipment number for the three-month period at 32 million units.

This number suggests Samsung is second in the market only to Apple, which shipped 35 million units.
According to Hyunjoon Kim, vice president of Samsung’s Mobile Communications Business, the launch of its third-generation Galaxy smartphone next month will give Samsung the boost it needs to propel itself to that coveted number-one seat.

"In the second quarter, we’ll strive to maintain to a solid growth, with the smartphone business leading the way. We expect to soon the launch the next Galaxy flagship smartphone," Kim said during a post-earnings announcement call with investors. "We have consolidated our efforts and expertise in developing this incredible product, and we will make a public announcement for this product in early May. We expect it to be our most successful smartphone ever and provide us strong momentum for taking on the lead in the worldwide smartphone market."

In addition to smartphones, Samsung pointed to its Display Panel business as contributing to its record-high profit. Demand for panels used in tablets and 3D or LED TVs, along with OLED panels, was strong, the company said, and the segment pulled in an operating profit of $24.7 million.

Results for Samsung’s chip unit, however, weren’t quite as rosy. Myungho Kim, vice president of Samsung’s Semiconductor Business, said that sales were hurt by weaker-than-expected demand for PC DRAM chips and the continued hard drive disk shortage spurred by October’s Thailand floods. The company reported a year-over year decline in semiconductor profits by 54 percent, but said it expects pressures from the shortage to lift next quarter.

The company announced this week a new quad-core version of its Exynos mobile processor, the Exynos 4 Quad, which it said will fuel its third-generation Galaxy smartphone launching next month. The chip is the first-ever from Samsung to be built using its 32-nm High-K Metal Gate (HKMG) processing technology, and is said to be both higher-performing and more energy-efficient than prior Exynos chips.