Samsung today has announced its earnings guidance for the first quarter of 2016. The company says that it will likely beat expectations with an operating income of $5.7 billion (6.6 trillion won), versus analyst expectations of 4.43 trillion won. The company reported strong results thanks to the release earlier release of the Galaxy S7 and Galaxy S7 Edge. Samsung traditionally releases its new flagship devices in April, but this year released them in May.
Samsung U28E590D 28-Inch 4K Monitor
Specifically in the mobile division, operating profit rose 19 percent to 3.18 trillion won or $2.75 billion. Bloomberg estimates that Samsung shipped 78 million smartphones during the first quarter of 2016, which is down 4 million units from the holiday quarter. Sales of the Galaxy S7 and Galaxy S7 are expected to have hit 9 million during the first month of availability, which is nearly triple the sales of the Galaxy S6 a year earlier.
Samsung is facing growing competition in the smartphone market. Apple, of course, remains a strong competitor, but smaller companies like Huawei and Xiaomi are eating into Samsung’s market. Huawei and Xiaomi are expected to renew their focus on markets where Samsung is normally very strong, including the United States. Huawei also reported strong 2015 performance and reportedly plans to launch a flagship device in the Untied States this year.
Nevertheless, it’s good to see Samsung beating estimates and reporting strong sales of its most recent flagship devices. The company usually struggles to follow the generally strong holiday quarter, but thanks to the earlier launch of its flagships, it didn’t have that problem this time around.