In contrast to Apple’s financial results for the first quarter of 2016, Samsung announced its official earnings for Q1 and saw a year-on-year 5.7% rise in revenue and 12% rise in profits thanks to the S7 series’ success.
In total, Samsung Electronics pulled in KRW 49.78 trillion (approx $43.7 billion USD) in revenue over the first three months of the year, with operating profits of KRW 6.68 trillion (approx $5.8 billion). Both of these figures were slightly higher than its respective estimates of KRW 49.0 trillion and KRW 6.6 trillion.
Part of the reason Samsung had such a good first quarter compared to last year was the earlier-than-usual launch of the Galaxy S7 and S7 Edge. The devices made their first public appearance at the end of February and were available to order almost immediately. What’s more, Galaxy S7 Edge demand is so high that the company is barely making enough of them. According to Lee Kyeong-tae, VP of mobile communications, the device was “being sold out almost immediately upon arrival” in China, the Middle East and North America.
Sticking with the smartphone angle, Samsung also announced that its streamlining efforts in the mid-to-low-end lineups also helped improve profit margins. In short: A strong performing flagship and the reduction of countless mid-rangers combined well to boost financials.
Sammy notes that its semiconductor business saw strong earnings despite the usual seasonality affecting demand. Similarly, LCD demand is dropping and affected the display panel division somewhat, but the OLED panels are selling well (mostly thanks to the S7).
If there’s one division performing really strongly, it’s the CE (Consumer Electronics) division, which “achieved significant earnings growth YoY led by expanded sales of premium TV models such as SUHD TV and Curved TV in developed markets.”
Looking forward to next quarter, Samsung notes that it expects earnings to be strong as the Galaxy S7 is expanded to further markets and strong semiconductor sales.