Samsung Posts Bumper Earnings Despite Epidemic

  • By Kim Seong-min

    April 08, 2020 11:05

    Samsung Electronics' first-quarter operating profit rose 2.73 percent to W6.4 trillion despite the coronavirus epidemic (US$1=W1,218). Sales jumped 4.98 percent to W55 trillion.

    The epidemic had a negative impact on smartphone and home appliance sales, but sales remained strong in the semiconductor division, the electronics giant said Tuesday.

    Market watchers had expected Samsung's overall operating profit to plummet, but the impact of the epidemic was smaller than expected.

    A customer looks at Samsung's Galaxy Z Flip smartphone at its flagship store in Seoul on March 6. /Getty Images

    Global financial market jitters caused the Korean won to fall, which appears to have offset weak sales. The average exchange rate stood at W1,175.8 to the dollar last year but weakened to W1,193.6 in the first quarter of this year. Cost savings on marketing due to the epidemic also helped earnings.

    Samsung's better-than-expected earnings were mainly attributed to strong sales of bread-and-butter semiconductors. Server demand increased as more and more people opted to telecommute, while schools offered online classes due to the virus.

    Prices of DRAM chips in March rose 2.08 percent to US$2.94 compared to February, continuing three months of gains.

    Second-quarter earnings prospects are unclear. Industry watchers forecast dire conditions from April to June with smartphones, home appliances and semiconductors all faring poorly as the epidemic rages through key consumer markets like the U.S. and Europe.

    The global smartphone market is expected to be hit hard, which should lead to decreased demand. The same goes for the home appliance and display businesses.

    The home appliance division had been expecting surging demand ahead of the 2020 Summer Olympics in Tokyo, but such hopes were dashed when the Olympics were canceled.

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