Korea - Samsung and LG Electronics post strong earnings estimate for 2017 Q1: ARIRANG NEWS

ARIRANG NEWS

Published on 7 Apr 2017

삼성, LG전자 1분기 실적

Both Samsung and LG expect strong earnings for the first quarter of this year,... in the case of the world's largest smartphone maker, almost its best ever.

According to our Oh Soo-young there are factors at play that could provide more cause for celebrations by the tech giants. 

Samsung Electronics has had a strong start to the year,... raking in what's expected to be the second largest quarterly profit in its history.

The Korean tech giant posted its earnings estimate for the first quarter, with sales amounting to 50 trillion won, or roughly 44 billion U.S. dollars.

Operating profit rose to eight-point-seven billion dollars,... up more than seven percent from the previous quarter and almost 50 percent higher than the year before.

That beats the market consensus of eight-point-one billion dollars. 

The electronic giant's gains are largely attributed to the rise in chip prices over the past year.

With Chinese smartphone makers working up an appetite for high capacity semiconductors,... experts believe the quarters ahead will see even bigger profits for Samsung, which leads both the DRAM and NAND flash markets.

Also, its new smartphone, the Galaxy S8, is expected post record-breaking sales of more than 50 million units in its first year. 

Even the next iPhone from arch-rival Apple is likely to boost Samsung's bottom line, with Apple having reportedly ordered some 70 million units of Samsung's OLED panels this year to upgrade its displays.

Local rival LG Electronics has also had a good quarter, recovering from its dip into the red at the end of last year.

The company bounced back with an operating profit of 812-point-3 million dollars,... up 82 percent on-year,... far exceeding the market's modest expectation of 517 million.

It posted sales of 12-point-9 billion.

Experts say 

LG sold more TVs and home appliances, but more than anything, improvements in the mobile division are what really drove up the margin. "The intensive structural reforms made in the fourth quarter of last year appear to be paying off. The mobile division was able to lower costs and its break-even point. Its sales of mid-to-lower end handsets to the North American market increased and, on top of that, the early release of the G6 smartphone was reflected at least partially, raising LG's profit line."

For the rest of the year,... analysts forecast continued growth in sales of home appliances by LG -- helped by new product releases and seasonal factors.

But its bottom line will be largely determined by whether its G6 flops or flies off the shelves.
Oh Soo-young, Arirang News.