Samsung expects a healthy jump in its first-quarter profit, probably due to strong demand for computers and home appliances during the pandemic.
The Korean electronics giant said Tuesday its profit for the three-month period ended March 31 would come in at about 9.3 trillion won ($8.3 billion), an increase over the year-ago period of 44%. The company also expects to record revenue of 65 trillion won ($58 billion), an increase of about 17% year-over-year.
The earnings guidance, released Thursday ahead of full earnings later this month, didn’t provide specific divisional results.
The apparent rebound comes after its mobile business sales tumbled 11% in the fourth quarter because of “intensified competition in the year-end season.” Samsung said in January it expected its Galaxy S21 lineup, which it introduced earlier that month, to boost its results in the first quarter.
Like its competition, Samsung is grappling with the coronavirus pandemic and the impact it’s having on consumers. When COVID-19 first started spreading, worries about the illness caused a dramatic slowdown in phone purchases as people around the globe decided the device they had was good enough.
Meanwhile, computers and TVs have been hot items with people stuck at home, and appliances are purchases consumers can put off only so long. Samsung has benefited from surging demand for all of those products, as well as for its components that provide memory storage for data centers and consumer devices. But Samsung said earlier this month expected first-quarter numbers to be hurt by costs associated with new production lines for its processors, despite “solid” demand for the chips.
Samsung was also forced to shift strategy for some of its mobile products, releasing the Galaxy S21 a month earlier than normal and offering at a lower price than last years Galaxy S20, with each model retailing for $200 less than its predecessor. The company hopes the lower price tag will help it attract buyers who had delayed upgrading their devices.
CNET’s Shara Tibken contributed to this report.