Samsung Points to S7 as Finance Booster

Samsung has predicted a rise in its Q1’16 financial results, which are due to be released this month. The company has said that, driven by sales of the Galaxy S7, operating profit will be as much as KRW1 trillion ($872 million) higher than originally forecast.

Operating profit for Q1’16 will be up 7.5% YoY, to KRW6.6 trillion ($5.8 billion), on revenue of about KRW49 trillion ($42.7 billion), up 3.3% YoY.

Sales of the Galaxy S7 smartphone are expected to exceed 10 million units in the January-March period – above Samsung’s original estimate of 7 million units, said LIG Investment & Securities analyst Shin Hyun-joon. A separate Korean analyst firm, KDBB Daewoo Securities, told the Korea Herald that it believes Samsung’s mobile business operating profit will jump 19%, to KRW3.3 trillion ($2.9 billion).

It should be noted that Samsung’s total operating profit, with these results, would still be 22% lower than Q1’14 (KRW7.6 trillion ($6.6 billion), Display Monitor Vol 21 No 18)

Analyst Comment

It is unlikely that the S7, which only went on sale in March, is responsible for the bulk of these figures, as Samsung suggests. Richard Windsor, author of the Radio Free Mobile blog, speculated that the semiconductor business also had an impact. (TA)