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Samsung Electronics posted a first-quarter profit Thursday that beat estimates on strong sales of handsets in emerging markets.
Net income rose to 7.15 trillion won ($6.4 billion) in the three months ended March 31, an increase from the company’s 5.05 trillion won ($4.55 billion) profit of a year earlier but a slight decline from the fourth-quarter’s $6.6 billion net profit, the South Korean Electronics giant said in a statement.
Revenue rose to $47.4 billion, a 15 percent increase over the year-ago period but a 6 percent decline over the previous quarter. The company recorded an operating profit of 8.78 trillion won ($7.9 billion), a 53 percent increase over the year-ago period but a decline of 1 percent from the fourth-quarter of 2012.
The results, which end the company’s string of record profit quarters at five, were in keeping with earnings guidance issued by the company earlier this month.
Though strong sales of the Galaxy S and Note have fueled Samsung record earnings growth in past quarters, the first quarter was expected to be a seasonal speed bump before the hotly anticipated Galaxy S4 went on sale this quarter. The new flagship smartphone was expected to propel the company to another record quarter, but the South Korean electronics giant warned that smartphone demand is expected to fall off in the second quarter.
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“Although market uncertainties from the European crisis and the slow global economic recovery are still lingering, we expect to increase R&D spending for strengthening our competitiveness ahead of planned new product launches,” Samsung investor relations chief Robert Yi said in a statement.
Samsung’s semiconductor business posted $7.7 billion in revenue, an 11 percent decline over the previous quarter. It expects demand for NAND flash memory to increase with the introduction of more-powerful devices. While the market for PC DRAM is uncertain, Samsung said it expects demand for mobile DRAM to see continued growth.
The company’s display-panel business recorded revenue of $6.3 billion, an 8 percent decline that Samsung blamed on seasonally low demand. The company saw a decline in the average selling price of LCD panels but expects a seasonal recovery in the later half of the year, especially for panels more than 60 inches in size.
“We may experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market while TV growth will continue to wane in developed markets,” Yi said.
