Samsung Electronics has today reported its earnings for the first quarter of this fiscal year. The company made a total revenue of 55.3 trillion won ($45.4 billion), marking a 5.6-percent year-over-year growth which the company says is because of the increasing demand for server and mobile components.
Despite the increasing demand, the company witnessed a 7.6-percent decline in revenue when compared to the previous quarter. According to Samsung, the fall is due to “weak seasonality” for its display and consumer electronics division and of course, the ongoing coronavirus pandemic.
The South Korean tech giant said its operating profit stands at 6.45 trillion won ($5.2 billion), which is 0.7 trillion lower when compared to the previous quarter but denotes a 0.2 trillion increase in year-over-year growth, thanks to its improved product mix in the mobile business and increased demand and adoption of OLED phones.
For the next quarter though, Samsung expects the overall earnings to decline due to economic restrictions imposed currently due to COVID-19. The overall business performance, product sales – especially smartphones and TVs are expected to go low. Closing stores have also created an impact on revenue. The company, however, expects its memory business to go unaffected.
“Sales and profits of set products business, including smartphones and TVs, are expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally. To address this, the Company will leverage its global production flexibility and supply networks as well as strengthening its online sales capabilities.”, wrote the company in a prepared statement.
Moreover, Samsung hopes to address risk factors impacting its business by focusing on target marketing powered by promotional discounts and the expansion of its product lineup during the second half of the year.
