Samsung Electronics has released its first earnings guidance for the year and if the figures are to be believed, the Korean giant has been relatively unfazed by the ongoing pandemic. While most of the industrial players have reported huge losses owing to disruptions in business, Samsung has still managed to stay in the green, albeit with a marginal growth over last year.
The Korean tech giant has predicted first-quarter sales of about 55 trillion Korean won ($44.9 billion) and an operating profit of about 6.4 trillion Korean won ($5.2 billion). The figures are slightly lower than what many analysts, including Reuters, had predicted, although Samsung has been able to increase the revenue and profit from last year. Samsung had reported revenue of 52.4 trillion won ($42.8 billion) and an operating profit of 6.2 trillion won ($5.1 billion) the same time last year. The shares for Samsung Electronics also reported a surge of 2.3%.
Although the smartphone sales, which account for almost 47% of Samsung’s revenue, have taken a steep hit, the memory chip market is what has bailed the tech giant out. The smartphone sales have fallen by almost by 38% in February, while the demand for memory chips for data centers has dramatically increased as more and more people jump on the work-from-home bandwagon.
“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, as reported by Reuters.
Samsung had acted timely to source out the production to other countries like Vietnam and India and that has certainly given the company an edge over its rivals. The chip-making business, which accounts for 50% of Samsung’s revenue, is set to see a further surge in the coming days given the current situation.