Samsung Reports Better Than Expected Q1 Profit
Samsung Electronics reported profit for Q1, showing that the surge in internet usage from people staying at home during the Covid-19 pandemic could help make up for a drop-off in demand for smartphones and other consumer electronics.
The global leader in semiconductors is benefiting from higher demand for chips from laptop makers and data centres amid the coronavirus-driven shift to working from home.
The Korean company posted operating profit of 6.4 trillion won ($5.2 billion) in the March quarter. Sales rose 5% to 55 trillion won, according to preliminary results released Tuesday. The company will provide net income and break out divisional performance later this month.
Samsung Electronics said in March the coronavirus pandemic would hurt sales of smartphones and consumer electronics this year, while demand from data centres would fuel a recovery in memory chip markets.
Foxconn, a key supplier of Apple’s products, said on Monday that its January-March revenue declined 12% from the previous year, after Apple warned it was unlikely to meet its March-quarter sales guidance.
When the outbreak first started in China last year, Samsung’s strategy of spreading out its production base to countries including Vietnam and India seemed to pay off as supply disruptions in China hit rivals such as Apple.
But as the virus spread across the globe, Samsung too has had to close factories and retail stores in Europe, India and the United States.