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Samsung Expects Revenue Growth of 5% Y/Y in Q120
April 12, 2020
Samsung Electronics estimated its Q120, revenue rose 5% Y/Y to 55 trillion won, in line with the 55.6 trillion won estimate. Samsung said operating profit was expected to be 6.4 trillion won ($5.2 billion) compared with 6.2 trillion won a year ago Last month, the company said the coronavirus would hurt sales of smartphones - which accounted for about 47% of its revenue last year - and consumer electronics in 2020, while demand from data centers would fuel a recovery in memory chip markets. “Even though Samsung’s mobile business was hit by the coronavirus outbreak this quarter, it will likely face bigger challenges in the second quarter - now that the United States and Europe have become the hardest-hit countries,” Kim Sun-woo, an analyst at Meritz Securities, said. Samsung’s strategy of spreading its production base outside China to Vietnam and India seemed to pay off as supply disruptions in China hit rivals such as Apple, Huawei and Xiaomi. But Samsung too has had to close factories and retail stores in Europe, India and the United States. NH Investment & Securities said it expected sales of Samsung’s premium Galaxy 20 smartphone to reach 20 million units this year, far short of the 32 million it had forecast earlier. Analysts say the company’s memory chip business, which generated more than 50% of its operating profit in 2019, would likely report better-than-expected results in the first half of this year. Memory chip prices are rising as work-from-home requirements boost demand from the data centers that support internet services such as streaming and cloud computing, analysts have said. Prices for DRAM memory chips are up more than 3.5% since January, according to industry tracker DRAMeXchange. LG Electronics said its first-quarter operating profit likely rose 21% to 1 trillion won. Analysts expect the coronavirus to affect LG in Q220.
April 12, 2020
Samsung Electronics estimated its Q120, revenue rose 5% Y/Y to 55 trillion won, in line with the 55.6 trillion won estimate. Samsung said operating profit was expected to be 6.4 trillion won ($5.2 billion) compared with 6.2 trillion won a year ago Last month, the company said the coronavirus would hurt sales of smartphones - which accounted for about 47% of its revenue last year - and consumer electronics in 2020, while demand from data centers would fuel a recovery in memory chip markets. “Even though Samsung’s mobile business was hit by the coronavirus outbreak this quarter, it will likely face bigger challenges in the second quarter - now that the United States and Europe have become the hardest-hit countries,” Kim Sun-woo, an analyst at Meritz Securities, said. Samsung’s strategy of spreading its production base outside China to Vietnam and India seemed to pay off as supply disruptions in China hit rivals such as Apple, Huawei and Xiaomi. But Samsung too has had to close factories and retail stores in Europe, India and the United States. NH Investment & Securities said it expected sales of Samsung’s premium Galaxy 20 smartphone to reach 20 million units this year, far short of the 32 million it had forecast earlier. Analysts say the company’s memory chip business, which generated more than 50% of its operating profit in 2019, would likely report better-than-expected results in the first half of this year. Memory chip prices are rising as work-from-home requirements boost demand from the data centers that support internet services such as streaming and cloud computing, analysts have said. Prices for DRAM memory chips are up more than 3.5% since January, according to industry tracker DRAMeXchange. LG Electronics said its first-quarter operating profit likely rose 21% to 1 trillion won. Analysts expect the coronavirus to affect LG in Q220.
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