Two years ago, Samsung Electronics witnessed an erosion of profitability of its powerful division in charge of smartphones, which allowed it to reach its most spectacular profits in 2013. After substantially revised its strategy and its product portfolio, the south Korean group seems to have succeeded, early this year, to wake this past magic, thanks to the success of its new Galaxy S7 and S7 Edge.
On Thursday morning, the company has unveiled quarterly results well above analyst expectations. According to its preliminary estimates, she would have seen its operating profit increase, year on year, 10.4% of the sequence from January to March to $ 6.600 trillion won (5 billion euros). Experts consulted by Bloomberg and Reuters had bet on 5.600 billion profit won. Samsung, which will present the final and detailed results at the end of the month, believes that this healthy smartphones has enabled it to generate a turnover of 49.000 billion won, against 47.100 billion in the first quarter of 2015.
more dynamic than expected sales
in recent days, analysts have noticed that sales of the two versions of the Galaxy S7 appeared much more dynamic than expected. Despite the growing popularity of Chinese brands Huawei and Xiaomi on the Android market, the group has already passed a total of 10 million worldwide since the beginning of the year, which would achieve a similar volume of 45 million on 2016.
If the new device has been well received specialized sites, its success is also linked to the change of thought launch strategy by Samsung. The group was first advanced nearly a month, compared with the Galaxy S6, the release of its new generation of devices. The S7 arrived in early March in several markets and the brand’s fans have therefore precipitate a few weeks their purchases. A shift that has boosted the first quarter performance but could eventually weigh negatively on the dynamics of sales in the second quarter.
Furthermore, Samsung Electronics has identified priority markets and made sure to have in these countries sufficient stocks. The group had previously was surprised by the success of its versions “Edge” and had not been able to meet demand.
Pessimistic investors
Trying to scrutinize the performance of the divisions in charge of semiconductors, which were back these recent quarters the main growth engine of Samsung’s profits, analysts struggled to identify strong trends. Some believe that the profits of the group in the last quarter benefited from improved profitability of 3D NAND memory chip and its system LSIs, while others fear that the group is still suffering from the price war in the sector.
Seeming opt for pessimistic reading, investors were back to mid-day the title of Samsung Electronics of nearly 1.5% instead of Seoul.
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