Samsung has announced its earnings for Q1 2015 today, which lines up closely with the company's guidance that was released earlier this month. In the first quarter of 2015, Samsung reported an overall revenue of 44 billion (KRW 47.12 trillion) and an operating profit of $5.63 billion (KRW 5.98 trillion). However, this is a drop in revenue but a slight increase in operating profit over the previous quarter. Compared to the same quarter last year, when Samsung reported an operating profit of $7.8 billion, there is a 30 percent drop in operating profit.
Coming to the important part of the earnings call, the company noted that the sales of its smartphones have increased, but the tablet and the feature phone sales have taken a hit. During the quarter, the company shipped 99 million handsets, and over 80 percent of these device were smartphones. A majority of these devices were shipped to Southeast Asia and the Middle East. Revenues from Samsung's mobile devices have decreased to $24.1 billion (KRW 25.89 trillion) with an operating profit of $2.5 billion (KRW 2.74 trillion). Apparently, the increase in smartphone sales is largely due to consumer interest in its Galaxy A series of devices. Samsung is planning to tap the growing low-end and middle-range smartphone market with a streamlined lineup.
While the company is confident that the sales of the Galaxy S6 and the S6 edge will outperform the sales of the Galaxy S5, the company's officials said that it's too early to predict the sales volumes of its latest flagship smartphone offerings. The company continued to blame seasonality and weakening global exchange for the ongoing decline of its business. SangHyo Kim, vice president of investor relations, admitted the company's mobile business continued to decline, but believes that it can regain growth momentum by focussing on technologies such as curved and flexible displays, Samsung Pay, and wireless charging.
JinYoung Park, vice president of Samsung's mobile communications business, said, “Market demand for the smartphone is expected to continue to increase, compared to the last year, due to global expansions of LTE services and growth in emerging markets. However, tablet market growth is expected to slow down. In 2015, we will continue to do our best to increase our smartphone business with our competitive product line-up. We plane to solidify our leadership in the premium handset market with differentiated features in our products.“
While the company's mobile devices division doesn't show much improvement, its semiconductor and display panel business continues to shine. The division's year-on-year profit is up by 81 percent to $3.1 billion (KRW 3.39 trillion), and the display panel business contributed $0.48 billion (KRW 0.52 trillion) to it, which is a turnaround when compared to $0.074 billion (KRW 0.08 trillion) posted last year. The company's memory business showed 2 percent increase in the revenue, thanks to its DDR4 and low-power DDR4 memory chips, while the consumer electronics group posted a loss of $0.13 billion (KRW 0.14 trillion).
