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Components drive record Samsung profits as mobile sales slide

Components drive record Samsung profits as mobile sales slide

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galaxy note 7
James Bareham / The Verge

Samsung Electronics has reported Q1 earnings in line with its guidance: as predicted, the company made an operating profit of 9.9 trillion won (about $8.7 billion), its second biggest quarter ever and its highest ever figure for the January to March period. Revenue was 50.55 trillion won, or about $44.7 billion.

Samsung says that the record-breaking profit was down to strong sales in its components businesses: mostly displays and memory. Although the Galaxy S8 wasn’t released in this three-month period, Samsung’s unit that develops processors and image sensors also improved its earnings, likely because of ramping up production in anticipation of the latest flagship launch.

But Samsung’s key mobile business saw revenue slide due to a decline in flagship product sales. That’s not altogether surprising considering the demise of the Galaxy Note 7, and it’s natural that demand would be lower for the Galaxy S7 range right before the launch of the S8. Samsung also lowered the price of the S7, further contributing to the decrease in revenue.

Samsung confirmed that a new flagship phone will be coming in the second half of the year, though it’s unclear whether it’ll adopt the tainted Note brand. If nothing else, the mobile business shouldn’t have much trouble posting better numbers this time next year.