Increased sales in the semiconductor business lead to Samsung's second-most profitable quarter.
Samsung has published its earnings results for the quarter ending in March 2017, and as it forecast a few weeks ago, Q1 2017 was very profitable for the company. Operating profit saw a massive year-on-year increase of 48% to $8.8 billion (9.9 trillion won), leading to Samsung's second-most profitable quarter ever and best-ever first quarter.
Net profit at $6.8 billion (7.68 trillion won) was also up 46% from the same period a year ago. Although profits increased significantly, overall revenue at $44.7 billion (50.55 trillion won) was a slight increase from Q1 2016's $44.01 billion (49.78 trillion won). Sales from the mobile unit declined, with the business posting an operating profit of $1.8 billion (2.07 trillion won), down 47% from the $3.4 billion (3.89 trillion won) it netted a year ago.
With the termination of the Note 7, Samsung had to rely on the Galaxy S7 for longer than intended, and the company had to reduce its price to be competitive. However, the manufacturer saw healthy sales of the mid-range Galaxy A 2017 as well as increased momentum in the mid- to low-end segments in emerging markets. Looking forward to Q2 2017, Samsung is bullish on Galaxy S8 and S8+ sales leading to increased profits and revenues. In addition to maximizing sales of the Galaxy S8, Samsung will launch a second flagship — theNote 8 — in the latter half of the year.
A bulk of Samsung's profits were from the semiconductor business, where the company saw increased demand for memory products. Overall profits from the division amounted to $5.57 billion (6.31 trillion won) on revenues of $13.8 billion (15.66 trillion won). Sales of DRAM and enterprise SSDs increased, as well as demand for 14nm application processors for mid-range phones and image sensors for flagships. Looking ahead, Samsung is counting on its recent 10nm node to drive growth, with the 14nm processors branching out into automotive, IoT and wearable segments.
Reader comments
Samsung posts record profits in Q1 2017 even as phone sales decline
I wonder if the old saying of "too big to fail" hold true here.
Even with things seemed to work against them, they still made tons of moolah.
Samsung are kind of like the new sony. They are top of most markets they are in and if they have an error with one device others make up for it. I am still wondering what's going to happen with Samsung and android. They seem to be looking to pull away with their own is so i wonder if they will leave android all together in the next few years
I don't think Samsung is going to leave Android.
The ecosystem of third-party apps is probably enough for them to remain on the platform.
It's called diversity
The brand name is very strong, the S8 is overpriced in my opinion, but every flagship is, plus Samsung have zero competition now(LG isn't even a threat).
Q2 and Q3 will be interesting, as OnePlus 5, HTC 11, Mate 10, Note 8 and many others will come, though Samsung could introduce amazing things on Note 8.
Less units but higher markup. Makes sense.
Zero competition? What about the pixel and lg? The incredibly predictable articles on some android sites that claim every android phone under the sun is incredible..except for any Samsung phone, which they always seem to claim is just ok.(in a sad attempt to get buyers to buy any other phone) You mean those blog posts didn't help lg and the pixel sell more units? Lol shocking
With the high profit numbers coming in from Samsung, and the 'higher price on the S8 and S8+ phones, I think Samsung will feel OK about continuing to raise the prices on their future phones. For many of us waiting on Note 8... we should be prepared for a thousand dollar, or more phone!
You guys bother to read the article?