Samsung Electronics Co yesterday forecast its biggest operating profit in more than two years, boosted by cost-cutting efforts and solid sales of its latest flagship smartphone.
The South Korean electronics giant — also the world’s top handset maker — predicted an operating profit of 8.1 trillion won (US$7 billion) in the period from April to last month, up by 17 percent from a year ago.
It was the company’s biggest operating profit since the first quarter of 2014 and beat the average estimate of 7.4 trillion won from analysts surveyed by Bloomberg News.
Photo: EPA
Analysts attributed the figures to the firm’s aggressive cost-cutting efforts and brisk sales of the Galaxy S7, the latest version of its high-end flagship smartphone.
“Samsung’s mobile unit is believed to have performed well thanks to robust sales of Galaxy S7s, as well as an overhaul of its low and mid-end handset lineup,” NH Investment & Securities Co Ltd analyst Peter Lee said.
He estimated that the firm had sold about 26 million units of the S7 since it hit stores in March ahead of new launches by competitors, including Apple Inc.
Samsung shares yesterday jumped 2.04 percent to close at 1.45 million won in Seoul.
The firm’s aggressive cost-cutting in marketing played a key role in the strong profit forecast, said Greg Roh of HMC Investment Securities, but he warned of more competition from Apple later this year.
“With Apple releasing new products in the latter half of the year ... I think [Samsung’s] earnings may drop in the second half,” he said.
However, the firm’s semiconductor business, which produces memory chips for Samsung gadgets as well as clients, including Apple, is likely to help offset a slump in the mobile business, Lee said.
The world’s No. 2 chipmaker has dominated production of faster, larger-capacity chips using a technology called 3D NAND. Samsung was the first to mass produce chips using the technology and is producing the high-margin chips — used in mobile gadgets and hard drives for servers — at its factories in South Korea and China.
Yesterday’s forecast, which comes ahead of audited results to be released this month, did not provide a net income figure or breakdown of divisional earnings for the company’s mobile, TV, semiconductor and display units.
It predicted second-quarter sales of 50 trillion won, up from 48.5 trillion won a year ago.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”