Samsung Q1 2016: quarter of growth, thanks to Galaxy S7 and S7 Edge

Samsung today announced the financial results for the first quarter of 2016, ended on 31 March. A quarter crescendo that exceeds official estimates communicated by the producer on 7 April regarding the turnover and operating profit, respectively, were 49.78 trillion won and 6.68 trillion won. Revenue rose by 5.7% on an annual basis, the profit increased by 12% compared to the same quarter of 2015. The credit for convincing performance goes primarily to the new top range Galaxy S7 and S7 Edge, came on the market in the quarter in question and received very positively by the market, but the Korean manufacturer also emphasizes the good results achieved in the semiconducting market and OLED screens.

Commercial activities related to the semiconductor market - including memory modules and those carried out by divisioner System LSI - have produced a revenue of 15.11 trillion won (7.94 of which generated from the sale of modules and storage devices) and an operating profit of 2.63 trillion won in the quarter in question. Sales have reached record levels, but the results were equally positive by expanding sales of products with high added value and reducing costs made possible by the migration from DRAM technology to the NAND. Sales of the System LSI Division saw an increase year on year thanks to growing demand for its products to 14 nm.

As for the NAND products, Samsung emphasizes the increase in demand for SSD high density for use in a business setting and storage solutions for the mobile segment. The expansion of the production of the V-NAND third generation and migration to the 10nm process has reduced parallel costs and increase profitability. Business relating to DRAM, despite declining sales of PCs, has continued to produce positive results in the financial statements due to the growing demand in the field of smart phones and servers.

The positive trend of the storage compartment will continue in the second quarter of 2016, according to Samsung forecasts, thanks to growing demand for high density SSD and storage media with capacity above 64 GB determined by the expansion of cloud services and the production of high-end smartphones. The DRAM memory sales could rise further as a result of the partial recovery of the PC market.

Display

More delicate the situation of the division that deals with the production and sale of display: Faced with a turnover of 6.04 trillion won, Samsung recorded an operating loss of 0.27 trillion won. In the current quarter deliveries of OLED panels are larger than the previous quarter thanks to the arrival of the new high-end smartphone and the solid demand for medium-low and low-end devices. In this growth factor, it contrasts with the fall in demand for LCD-type panels.

To return to determine the raise the question of LCD panels in the second quarter, Samsung aims to increase deliveries of premium products, such as UHD screens and large. The wines of Korean promises a less critical situation for OLED panels, whose application will continue to remain high in the coming months, thanks to growing demand for lower-middle-end smartphone.

Mobile

Samsung's mobile division did particularly brilliant results in the first quarter of 2016 with 27.60 trillion won, a figure that translates into an increase of 6.6% year on year, and an operating profit of 3.89 trillion won, or an increase of 42% on an annual basis. Operating profit therefore increased even in the face of an application for smartphones and tablets down slightly compared to the same period last year. The credit goes to the success of the two new smartphones for premium customers, Galaxy and Galaxy S7 S7 Edge, well received by experts, but especially from the market and end users.

Samsung takes note of the static trend of the smartphone market (see the latest IDC statistics), but remains optimistic about the results they can achieve in the next quarter. On the one hand the new top range will continue to support the store, on the other, to achieve the same purpose in the mid to low end will be models of the Galaxy line A and Galaxy J.

There's also a reference to the electronic payment service Pay Samsung - which the company plans to further expand in the year - and the results that aims to reach in the network infrastructure market, characterized by the expansion of 4G LTE network services into new markets, including those of southeast Asia.

TV and Home Appliance

The division Consumer Electronics (Visual Display, Digital Appliances, printing solutions, devices and equipment intended all'impieto in medicine, etc.) - has recorded a turnover of 10.62 trillion won and an operating profit 0.51 trillion won. Samsung points out the reduction in demand in the TV segment, due to seasonal factors and the economic crisis in emerging markets; growing, on the contrary, the request VD in the business, driven by sales of premium products such as TVs and SUHD curves.

As for the business Home Appliance (appliances / white), the Korean manufacturer emphasizes the growth factor represented by the demand from the North American market and increased sales of innovative products for premium customers, such as refrigerators Chef Collection and washing machines Activewash .

Samsung expects a slight increase in demand for TV, partly due to important sports events, such as Olimipiadi 2016. The company's objective is to further improve profitability by focusing on TV SUHD equipped with Quantum dot display and increasing sales of premium products with the curves and UHD TV. growth forecasts for the sales of the Home Appliance products determined by seasonal factors (eg. air conditioners), and greater efforts to improve sales of the most innovative products in the field of home.