Samsung Electronics flags Q2 profit fall as coronavirus hits sales of smartphones, TVs

Samsung's net profit fell 3 per cent to 4.9 trillion won, while revenue climbed 5.6 per cent to 55.3 trillion won.
Samsung's net profit fell 3 per cent to 4.9 trillion won, while revenue climbed 5.6 per cent to 55.3 trillion won.PHOTO: REUTERS

SEOUL (REUTERS) - Samsung Electronics said on Wednesday (April 29) it expected its profit to decline in the current quarter, as strength in the chip business would be offset by a sales slump in smartphones and TVs.

Samsung said its first-quarter operating profit rose 3 per cent in the January-March period, in line with an earlier estimate, as the stay-at-home trend due to the Covid-19 pandemic cushioned the virus blow.

The South Korean tech conglomerate's chip business is benefiting from demand for servers and computers as stay-at-home orders force millions of people around the world to convert their homes into offices.

But sales of TVs and smartphones have slowed as recession-wary consumers postpone purchases of non-essential consumer electronics, a trend seen across the global tech industry.

"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," Samsung said in a statement.

The world's top maker of memory chips and smartphones reported an operating profit of 6.4 trillion Korean won (S$7.4 billion), compared with 6.2 trillion won a year ago and its earlier estimate of 6.4 trillion won.

It said net profit fell 3 per cent to 4.9 trillion won, while revenue climbed 5.6 per cent to 55.3 trillion won.

Samsung Electronics shares fell 0.8 per cent in a flat wider market in morning trade on Wednesday. The shares are down 10 per cent so far this year, in line with the wider market.