Samsung reports record operating profits for Q1; Galaxy S9 production cut says analyst

Samsung reports record operating profits for Q1; Galaxy S9 production cut says analyst
Earlier this month, Samsung gave a preview of its first quarter earnings and said that it would report record operating profits. And sure enough, the company announced on Thursday morning (thanks to the time difference, it is the next day in South Korea) that it achieved a fourth consecutive quarter of record operating profit. Leading the way for the company was sales of memory chips.

During the first quarter, Samsung reported net profit of 11.69 trillion South Korean won, equivalent to $10.8 billion USD at current exchange rates. That happens to be a healthy 52% gain from the net profit of 7.68 trillion won reported by Sammy for the first three months of 2017. Operating profit, at a record 15.64 trillion won ($14.5 billion USD), was up 58% from Q1 2017's 9.9 trillion. Top line growth amounted to 20% as revenue during the January through March period totaled 60.56 trillion won ($56.1 billion USD), compared to 50.55 trillion won garnered during the first quarter of 2017.

Some analysts are forecasting a quick and sudden end to Sammy's record breaking streak. Chip prices aren't expected to jump in price as much as they did during the last year, and high-end handset sales are being hampered by the increase in the upgrade cycle. Those buying expensive flagship models haven't been so eager to replace their phone every two-years ever since carriers stopped subsidizing handset sales.

Samsung's Q1 2018 earnings report slightly topped expectations from brokerage firm analysts. On average, the analysts estimated that Samsung would report sales of 60 trillion won and profits of 11 trillion won. The company did benefit from the earlier release of its new flagship phones, the Samsung Galaxy S9 and Samsung Galaxy S9+. The pair were released in March, in time for some sales to count toward the first quarter results. Last year, the 2017 flagship models were launched in April, which meant that initial sales of those phones were included in the second quarter of 2017. That could hurt comparisons when the company reports in earnings for the second quarter of this year.

On Wednesday, we told you that Samsung had shipped 8 million units of the Galaxy S9 and Galaxy S9+ during the first month of the handsets' availability. But some analysts expect sales of these phones to cool off. For example, Susquehanna analyst Mehdi Hosseini recently told clients that the manufacturer has cut production plans for the Galaxy S9 from 40 million units to a range of 32-34 million.

source: WSJ

Related phones

Galaxy S9
  • Display 5.8" 1440 x 2960 pixels
  • Camera 12 MP / 8 MP front
  • Processor Qualcomm Snapdragon 845, Octa-core, 2800 MHz
  • Storage 64 GB + microSDXC
  • Battery 3000 mAh(31h talk time)
Galaxy S9+
  • Display 6.2" 1440 x 2960 pixels
  • Camera 12 MP / 8 MP front
  • Processor Qualcomm Snapdragon 845, Octa-core, 2800 MHz
  • Storage 64 GB + microSDXC
  • Battery 3500 mAh(35h talk time)

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21 Comments

1. Papa_Ji

Posts: 859; Member since: Jun 27, 2016

Can't imagine a world without Samsung.

2. umaru-chan

Posts: 371; Member since: Apr 27, 2017

You have zero imagination prowess. On the other hand, Samsung mobile is going to struggle because of their boring s9 series, they can ship whatever number they want but their sales figures will be much less as many analysts predicted. Xiaomi is killing the mid-low end range for Samsung and now Huawei with their excellent p20 pro will put significant pressure on their high end. Things will get worse for Samsung mobile in the near future. This is the beginning of the end of Samsung mobile dominance in the Android world.

3. Macready

Posts: 1824; Member since: Dec 08, 2014

"This is the beginning of the end of Samsung mobile dominance in the Android world." Sure, could be, but we have heard the exact same thing for about... 5 to 6 years now? Yes, even a broken clock is right twice a day.

5. umaru-chan

Posts: 371; Member since: Apr 27, 2017

So basically with your last statement you are reluctantly saying I'm right. LoL. If xiaomi continues their 5 percent profit margin they will surely surpass Samsung within 5-6 years, hell I'll be not surprised if they are able to do it in 3 years. They lacked brand recognition but things have changed in last 5-6 years. Xiaomi is now a well known brand in many parts of the world. With upcoming Android one redmi device even more people will jump into xiaomi ship. With xiaomi getting serious in Europe and Huawei now a well positioned top premium mobile brand in Europe Samsung mobile will continue to sell less in low-mid-premium segments in Europe. Only geographical area where Samsung will continue to dominate will be USA. But that too will face challenge in the future with Google's pixel line up. With Google's massive marketing budget they will accomplice the pixel line as a viable alternative to Galaxy lineup to general consumers. So all things considered and seeing the recent trend I'm well positioned to call " this is the beginning of the end of dominance of Samsung mobile in the Android world".

10. Macready

Posts: 1824; Member since: Dec 08, 2014

No, I'm saying your guess is just that, a guess that is likely wrong again, with a small chance of being right. Looking at the actual numbers, sales for Mobile went up by 21% and operating profits by a whopping 82% in a stagnant or retracting market. In stark contrast with your above claims, they do much better than the overall Android market. And increasingly better at that. Huawei is starting to plateau with its unit sales too, but at a much lower bar (with revenue and profit growth being lower than Samsung too, even on a percentage basis). The race to the bottom isn't one to aspire. The margins in the bottom and mid market are fading, so competion just drives out players, but not the one with the strongest foot in the high end. See the the factual numbers.

11. umaru-chan

Posts: 371; Member since: Apr 27, 2017

Please give some references of all the numbers you gave. Thanks in advance. Samsung mobile dominance thanks to the big sale of their low-miss range. With xiaomi and oppo continue to win low-mid range Samsung mobile will soon feel the heat. Samsung is no longer a big player in China and now in India xiaomi is the bigger player. They may make more money now but the momentum sure is changing. Let's us see how well Samsung mobile is doing in the next quarter.

18. GalaxyLeads_iCrapFollows

Posts: 216; Member since: Nov 29, 2017

You are delusional. chinese companies will never overtake Samsung. Samsung is too far ahead of the chinese in technology and the whole world depends on Samsung for their electronic components. Also chinese companies can only pick up bread crumps as they only attract the middle and low ends in poor third world countries like india and china. Even if huawei is doing well in Europe, it is still a small market compared to the US. The US is the world's biggest market. For xiaomi or huawei to overtake Samsung, they need to do well in the US and there's no way that's every going to happen. Even huawei just gave up on it as they know the US government is wise enough to never allow them to get in. The only thing good about the Google pixel is the camera but the S9 camera is still more well rounded and beats the Pixel in most use cases as reported by user experiences around the web. Besides the camera, there's tons of problems with the Pixel phones not to mention the ugly huge bezels were designed by the Flinstones, whereas Galaxy phones are designed by the Jetsons.

4. VasiliS7

Posts: 202; Member since: Jan 10, 2017

Boring design the S9 ??!! Sorry but now, you have zero sense of design. The time Samsung makes money from "strangled" sales of S9 and mobile devision, Huawai makes only market share from pumped Sales..This is Just pathetic for a company who respect her business.

6. umaru-chan

Posts: 371; Member since: Apr 27, 2017

I can see that carefully reading is not one of your big forte. My advise to you is read carefully and try to comprehend what people are saying.

9. Marcwand3l

Posts: 446; Member since: May 08, 2017

>Xiaomi is killing the mid-low end range for Samsung

15. xfire99

Posts: 1206; Member since: Mar 14, 2012

And you hade zero knowledge about what patents are. Reason Xiaomi only sells within China/Asia, is because they are copycat and infrigments on alot patents. If they wants to do business outside China, they will start to pay license fees, taxes and alot more or get sued. You really believe that bulls**ts about 5% margin will hold even outside China? All the costs to export their brand outside China will get them bankrupt if keeping that 5% margin profit dude. I love Xiaomi products, but only as long they are cheap with quality. But that 5% margin profit won't hold when they start selling globally too. Just look at Xiaomi EU online stores like UK. Where is 5% margin only? It costs 3-5 times more than ordering directly from China 3rd party reseller. Oneplus was cheap from beginning, now they start selling outside China and are they still keeping same low prices as before? You don't have a clue how business works globally, dude.

12. piyath

Posts: 2445; Member since: Mar 23, 2012

It's all about components. Their mobile division is basically dead. They make money by high prices of memory and RAM. Display orders from Apple made a huge impact too.

17. Sammy_DEVIL737

Posts: 1529; Member since: Nov 28, 2016

Their mobile division is basically dead. Lol wtf are you in your senses?? I can see many people around me getting and using S, Note, A, J, Cseries phones.

19. tedkord

Posts: 17414; Member since: Jun 17, 2009

Same song you've been singing for years. Maybe one day it'll be right.

20. Techist

Posts: 311; Member since: Jan 27, 2015

"Their mobile division is basically dead" you say. Meanwhile, Bloomberg reports that "Samsung’s mobile unit, which rolled out its flagship Galaxy S9 smartphone in February, reported operating profit of 3.77 trillion won." 3.77 trillion won = 3.494 billion US$. This is just for the 1st quarter of 2018, mind you. So if this is what basically dead means from your perspective, virtually every other company on earth would just LOVE to be so dead, including the one you work for.

7. JohnR

Posts: 158; Member since: Sep 08, 2017

I'm not worried one bit about Samsung. Their profit margin doesn't revolve around fickle smartphone sells, so.. try again ?

8. Marcwand3l

Posts: 446; Member since: May 08, 2017

Samsung electronics is not dependent on Galaxy S9 sales or smartphone sales in general. They have more than 1 cash cows(their silicon manufacturing business, display business etc.) Anyway as a general consumer I'm glad Samsung has great financial results because Samsung is one of the companies that spends the most on R&D and they don't keep their innovations locked and only available for themselves. Keep it up Samsung.

14. Hollowmost

Posts: 424; Member since: Oct 10, 2017

Samsung sells more smartphone than any other company .. not only the Series get Samsung money , there is note , J , A ,

13. TheDudeAK47

Posts: 2; Member since: Mar 01, 2018

They were the leader in technology for years, now they are also the leader in design after all the others embraced the ugly notches. Easy choice for consumers.

16. Maccyb

Posts: 11; Member since: Oct 06, 2017

A lot of this article directly contradicts Samsungs actual financial report. Samsung S9 is selling extremely well and there is absolutely no reports of production cuts. Just go to the news dot samsung dot com /global to get the real story.

21. Tipus

Posts: 894; Member since: Sep 30, 2016

According to iZombies , samsung mobile division should've been out of business since 2007. Every year "samsung is basically dead" :)))

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