Samsung sees 44% profit jump in first quarter from strong Galaxy S21 sales

An earlier launch date and high sales of the Galaxy S21 series were what led to Q1 profit growth for Samsung, analysts said.

Samsung Electronics saw a significant jump in its operating income for the first quarter of 2021, backed by robust sales of smartphones that offset lowered profits from its semiconductor division.

In its earnings guidance on Wednesday, the company said it expected operating income of 9.3 trillion won and sales of 65 trillion won for the quarter. This is an increase of 44.19% and 17.48%, respectively, from the year prior.

The mobile division led the growth, in large part due to the Galaxy S21 series' launch in January, which occurred a month earlier than the flagship line's usual release date. Samsung had previously said the S21 was selling faster than the S20.

South Korean analysts expect the mobile division to have contributed more than 4 trillion won in operating income.

The company's consumer electronics division, which sells TV and appliances, is also expected to have benefited from continued pent-up demand from the pandemic during the quarter.

Samsung's semiconductor division, meanwhile, is expected to record its lowest profit in years, despite the high demand for chips globally.

The division's profitability was hampered by the costs of running its facilities, such as the application of extreme ultraviolet (EUV) and experiencing the month-long halt of its plant in Austin, analysts said.

But as memory prices have increased, the division is expected to lead the pack in profits again in the second quarter, they added.

Samsung will announce its full earnings report for the quarter at the end of the month.

Meanwhile, LG Electronics is also expecting a similar surge in profits for the quarter. The company said in its earnings guidance that it expected sales of 18.8 trillion won and operating income of 1.51 trillion won. 

This is an increase of 27.7% and 39.2%, respectively, from a year prior. LG said the figures are its best quarterly performance to date.

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