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Samsung Electronics Co. reported Wednesday a slight decline in its first-quarter net profit despite increased computing demand for its memory chips, warning that the coronavirus pandemic’s impact could further threaten the company’s margins throughout the rest of the year.
Samsung Electronics Co. reported Wednesday a slight decline in its first-quarter net profit despite increased computing demand for its memory chips, warning that the coronavirus pandemic’s impact could further threaten the company’s margins throughout the rest of the year.
The South Korean technology giant said its first-quarter net profit dipped to 4.88 trillion South Korean won ($3.99 billion), compared with 5.04 trillion won the prior year. Revenue rose about 5.6% to 55.33 trillion won from 52.39 trillion won during the same period a year ago.
Samsung, the world’s largest smartphone and memory-chip maker, had forecast a limited hit to its first-quarter earnings. The company benefited from a bump in chip sales as people worked from home during the Covid-19 pandemic, causing internet use to spike and its semiconductor operating sales to rise 22% over the prior year’s quarter. Online traffic flows through data centers and servers that rely heavily on semiconductors.
But other parts of the company have languished as supply chains dried up and consumer demand plummeted. Operating sales for the company’s mobile division dipped 4% compared with the prior year, despite Samsung’s launching in February a new lineup of handsets that typically deliver an earnings boost. The company said it expects handset demand to decline further as stores remain closed and the market shrinks.
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