Samsung had a successful first quarter of 2024. The company generated a consolidated sales revenue of KRW 71.92 trillion (roughly $52.08 billion) in the first three months of the year. Its operating profit was KRW 6.61 trillion (~$4.78 billion), a whopping 933% increase from the same period last year. Semiconductor and smartphone businesses contributed the most to its profit in Q1 2024.
Samsung sees a 933% profit increase in the first quarter of 2024
A global decline in semiconductor prices led to a sharp decrease in Samsung’s profit last year. The company took home KRW 0.64 trillion, KRW 0.67 trillion, KRW 2.43 trillion, and KRW 2.82 trillion in the four quarters, respectively. Its total annual profit of KRW 6.57 trillion was a staggering 85% less than what it made in 2022. The firm registered its first loss from the chip business in 14 years.
As the semiconductor market recovers, Samsung is seeing its earnings improve. The company is the world’s largest maker of memory chips, which have been its cash cow in the past. After a dismal show in 2023, the business unit returned to profit in Q1 2024, helping the Korean firm post a good total in the operating profit column. Strong sales of the Galaxy S24 series also contributed to its growth.
According to Samsung, generative AI solutions, DDR5 and high-density SSDs, HBM (High Bandwidth Memory), UFS 4.0, and several other memory and non-memory chips saw strong demand this past quarter. This bumped the average selling price, leading to a bigger profit margin for the company. The foundry business is still in loss but the losses are narrowing thanks to efficiency efforts in fab operations.
The mobile and networks business was the biggest contributor to Samsung’s profit in Q1 2024. The unit generated an operating profit of KRW 3.51 trillion. Despite a low demand for premium and mid-range smartphones, the Galaxy S24 series sold well. The new flagships maintained solid double-digit profitability, which is a great sign. Its Galaxy AI is proving to be a major sales driver.
Samsung surpassed industry estimates this past quarter
According to CNBC, LSEG (London Stock Exchange Group) estimated Samsung to generate a revenue of KRW 71.04 trillion and a profit of KRW 5.94 trillion in Q1 2024. While the estimated revenue is in line with what the company generated, its quarterly profit is substantially high. This suggests the Korean firm has sailed through the storm and is on its way to increasing its profit margin. It remains to be seen how Samsung’s various business arms perform throughout 2024.