Samsung posts ‘solid’ Q1 results, forecasts weak Q2 profit due to COVID-19

The company’s Q1 operating profit increased by KRW 0.2 trillion ($164 million) in Q1 2020.

What you need to know

• Samsung Electronics has announced its Q1 2020 financial results.
• The company reported quarterly operating profit of KRW 6.45 trillion ($5.3 billion) and sales of KRW 55.33 trillion ($45.4 billion).
• It is anticipating a decline in revenue in Q2 2020 as COVID-19 will impact demand for its core products.

Samsung today announced its financial results for the first quarter of 2020. The company reported total revenue of 55.33 trillion ($45.4 billion) during the quarter, 7.6% lower from the previous quarter. When compared to the same period a year earlier, however, revenue rose 5.6% thanks to increased demand for the company’s server and mobile components.

Operating profit, on the other hand, came in at KRW 6.45 trillion ($5.3 billion), down by KRW 0.7 trillion compared to the previous quarter. Samsung says the operating profit was affected by weak seasonality for some businesses such as consumer electronics and effects of COVID-19. It expects overall earnings for the second quarter to decline as demand for smartphones and consumer electronics is likely to decrease sharply because of the pandemic.

Samsung’s Mobile Communications division posted KRW 26 trillion ($21.3 billion) in revenue and KRW 2.65 trillion ($2.15 billion) in operating profit for the quarter. Even though market demand dipped in the first quarter due to COVID-19, profits increased compared to the same period a year earlier, due to the launch of the Galaxy S20 series and more judicious management of marketing expenses.

In the second quarter, Samsung expects demand for smartphones to drop significantly in most markets due to the impact of COVID-19. The company has also confirmed that it will be launching new foldable and Note phones in the second half of the year to “offer differentiated products in the premium segment.” At the same time, it will focus on bringing 5G to the masses and improve its operational efficiency.

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