Samsung profits jump 14% on success of Galaxy S7 smartphone

Samsung's revenue for the quarter was KRW 49.78 trillion, an increase of 5.7 percent YoY, while operating profit for the quarter was KRW 6.68 trillion, an increase of 12 percent YoY.

Samsung Electronics posted first-quarter profit that beat analyst estimates as it capitalized on a lull in new Apple products with the early release of its Galaxy S7 smartphones.

Counterpoint Research Senior Analyst Tarun Pathak told ET, "The impact of Galaxy S7 sales was for half month in March and the full impact will be in the current quarter whereby we expect Samsung may further expand its lead in the premium segment considering iPhone SE has been lukewarm demand till now". However, its profit (10.5 billion dollars - 9.5 billion euro) is still astonishing despite the fact it also dropped 22 % compared to the year before. Profit for the mobile division was 3.89 trillion KRW, up from 2.74 trillion KRW one year ago.

Samsung Electronics launched the latest versions of its flagship Galaxy smartphones on March 11, about a month earlier than its new phones launch past year.

Besides the S7 series, Samsung also said improved cost efficiency through the streamlining of mid-to-low-end smartphones helped the growth.

The company, without naming Nokia, said it had a one-time royalty settlement in the quarter that amounted to less than 1 percent of the mobile division's revenue.

Boasting a better camera, microSD storage and waterproofing the Galaxy S7 lineup of phones in on track to set new shipment records for the first year, lifting the hopes that the mobile business can post its first profit gain for a year in the past three years. The System LSI Business will strive to improve profitability YoY by increasing 14nm shipments and enhancing mid-to-low-end SoC line-ups.

"The S7 and Edge are showing robust sales performance in regions including North America", Lee said. The shares closed down 2.7% at W1,265,000. But to be fair, Samsung had about two years of nearly unremittingly blah quarterly results before it finally got a break. "That fear has been reflected in the share price". Operating profit for the chip division fell 6 percent to 2.6 trillion won, undercut by price declines for memory chips stemming from slower demand for products such as personal computers. Over the coming three months, the tech giant plans to cancel 1.3 million common shares and 0.32 million shares. The dropping sales numbers led Samsung to seven consecutive quarters of profit decline.

Source: Samsung profits jump 14% on success of Galaxy S7 smartphone