Samsung Reports Results for First Quarter

Samsung reported an operating profit of $5.3 billion on revenues of $45 billion for the quarter ending March 31. Both are improvements over the year-ago quarter, and the company credited its server and mobile components businesses for the jump. But it also warned that it will see major declines in the current quarter due to the COVID-19 pandemic and weak seasonality in its display and consumer electronics businesses.

(Samsung had previously announced estimates for the quarter. Today’s figures represent the final results.)

Problematically, some of Samsung’s core businesses—including smartphones and TVs—are “expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally.” It still plans to launch next-generation Galaxy Note and Galaxy Fold handsets in the second half of the year, however.

And there’s some good news for Samsung, too: The most profitable part of the company, its Memory business, is surging because of increased demand for cloud data centers from providers like Amazon and Microsoft. The company expects the Memory business to “remain solid” in the current quarter.

Predicting for the long term is difficult, of course, but Samsung says that demand for memory could decline in the second half of the year, even if the pandemic continues unabated. But demand for consumer electronics products, especially 5G-capable smartphones, is expected to surge whenever things return to some semblance of normal.