Samsung Electronics set for best profit in years

Despite everything, Korean tech giant Samsung has guided significant year-on-year increases in sales and operating profit for the first quarter.

These guidance announcements are usually short and sweet, and this was certainly no exception to that rule. Samsung Electronics guided that it expects to book sales of around 77 trillion won, which would represent a 15% increase on Q1 21, and operating profit of around 14.1 trillion won, up a massive 33% year-on-year.

There were no canned quotes provided, which is no great loss, but there is some extra colour to be got from the general business press. The FT confirms this profit number will be the highest for four years, but notes this seems to have done little to calm investor nerves about its growth strategy and technological competitiveness.

As you can sort of see in the FY 21 table below, Samsung Electronics makes most of its money from smartphones and chips. There always seems to be an element of gratuitous sadism to the opacity of these public accounts, with ‘MX’ refering to smartphones because it stands for ‘mobile experience’ – Duh! ‘DS’ stands for devices solutions – what the rest of us call components. Most of that money comes from DRAM memory and Flash storage. ‘DP’ stands for display panels, otherwise known as screens, while ‘VD’ refers to tellies, of course.

Reuters reckons the strong numbers are mainly down to favourable conditions for Samsung in the Flash market. Additionally its latest flagship smartphone seems to be doing alright, which will have helped the margins coming out of the smartphone division. On the whole the numbers seem like a decent effort when you consider how much general uncertainty and disruption there is in the world right now. Investors beg to differ, however, with Samsung’s share price flat after the announcement.

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