Samsung Elec more likely to report highest Q1 revenue since 2018 on chips By Reuters

© Reuters. FILE PHOTO: The emblem of Samsung Electronics is seen at its workplace constructing in Seoul, South Korea South Korea, October 11, 2017. REUTERS/Kim Hong-Ji/File Picture

By Joyce Lee

SEOUL (Reuters) – Samsung Electronics (OTC:) Co Ltd is more likely to put up its highest first-quarter revenue since 2018, analysts’ estimates confirmed, pushed by brisk earnings on reminiscence chips as strong demand helped to maintain costs firmer than anticipated.

Working revenue for the world’s greatest smartphone and reminiscence chip maker doubtless hit 13.3 trillion gained ($10.9 billion) within the quarter led to March, in response to a Refinitiv SmartEstimate from 13 analysts, which is weighted towards those that are extra constantly correct. That might be up 41% from 9.38 trillion gained a 12 months earlier and the best revenue for its comparatively sluggish first quarter since 2018.

The South Korean tech large will announce preliminary outcomes on Thursday.

Samsung (KS:)’s Q1 chip revenue is more likely to attain 7.6 trillion gained, greater than double the earlier 12 months’s 3.37 trillion gained, in response to a median forecast of six analysts.

Its chip enterprise contributes about half of the tech large’s earnings.

Chip costs held up higher than anticipated within the first quarter, analysts stated, regardless of pulling again after a surge over the previous 12 months when purchasers constructed up shares to protect towards provide chain bottlenecks. They famous that sturdy demand and cautious funding spending had given a lift to the sector.

“Stable chip demand from knowledge centres, chipmakers’ conservative funding to defend towards falling costs, and high-end product gross sales have restricted the decline in reminiscence chip costs,” stated Doh Hyun-woo, analyst at NH Funding & Securities.

Samsung’s cellular enterprise revenue is estimated at 4.04 trillion gained in response to a median forecast of six analysts, barely down from the earlier 12 months’s 4.39 trillion gained however above its cellular earnings throughout the identical interval in 2017-2020.

Samsung launched its flagship Galaxy S22 smartphone in February, which doubtless offered about 8 million models through the first quarter in response to Greg Roh, head of analysis at Hyundai Motor Securities.

Samsung has the biggest share of Russia’s smartphone market at about 30 p.c, however Roh stated a halt in shipments there would have little impact since Russia and Ukraine account for less than an estimated 2% of Samsung’s whole, and this is able to be offset by gross sales to different areas.

Samsung stated in March that shipments to Russia had stopped after the invasion of Ukraine, though providers equivalent to Samsung Pay proceed to be provided in Russia in response to social media messages. Samsung shares have fallen about 12% year-to-date, damage by worries over the impression of the Ukraine disaster on world tech machine demand and considerations about low manufacturing yields at its cutting-edge contract chip manufacturing operation.

Samsung’s co-CEO final month addressed shareholder considerations about its manufacturing processes for chips with 5-nanometre or narrower circuitry, saying they have been step by step enhancing.

($1 = 1,216.4000 gained)