Samsung flags uncertain economic climate after smartphone, chip sales power quarterly results beat
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Samsung Electronics exceeded analysts’ expectations with its operating profit and revenue for the quarter, driven by strong sales of the Galaxy S25 smartphones and memory chips.
The company reported a record quarterly revenue, up 10% year-on-year, and a 1.5% increase in operating profit for the first quarter.
Here are Samsung’s first-quarter results compared to LSEG SmartEstimates:
- Revenue: 79.1 trillion Korean won ($55.4 billion) vs. 78.1 trillion Korean won
- Operating profit: 6.7 trillion Korean won vs. 6.4 trillion Korean won
First-quarter revenue slightly exceeded Samsung’s forecast, while operating profit also outperformed the company’s expectations.
Samsung, a key player in memory chips and smartphones, highlighted macroeconomic uncertainties but expects improved performance in the second half of the year.
Shares of Samsung Electronics in South Korea were trading down by about 0.4%.
Memory business
Samsung Electronics’ chip business saw an operating profit of 1.1 trillion Korean won in the first quarter, with revenue increasing year-on-year.
The company attributed the revenue growth to expanded server DRAM sales and increased NAND demand.
While demand for memory chips has risen due to the AI boom, Samsung’s earnings were impacted by lower selling prices and sales affected by U.S. export controls on AI chips.
Samsung faces competition from SK Hynix in the memory chip market, particularly in high bandwidth memory (HBM) for AI servers.
In the current quarter, Samsung aims to capitalize on AI server demand and enhance its position in high-value-added products like HBM.
A recent report from Counterpoint Research revealed that SK Hynix surpassed Samsung in overall DRAM market revenue, driven by its dominance in HBM.
SK Hynix’s strong performance in high bandwidth memory offerings contributed to its quarterly revenue and operating profit exceeding estimates.
Samsung experienced deferred HBM demand in the first quarter but plans to strengthen its position in high-value-added products in the following quarter.
Smartphones
Samsung’s mobile division reported increased sales and profit, attributed to the successful launch of the Galaxy S25 smartphone series.
The company plans to sustain sales with the upcoming launch of the Galaxy S25 Edge smartphone and further enhance its smartphone lineup with AI-powered features.
Correction: This story has been revised to reflect that operating profit in the chip segment declined both on a quarter-on-quarter as well as year-on-year basis.
