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Samsung hit a record profit

Samsung hit a record profit

Photo by Anton Belitsky / Kommersant | buy a photo

In the first quarter, operating profit of the South Korean corporation Samsung Electronics grew by 58% and reached a record $ 14.7 billion. Nevertheless, shares of the corporation after that fell, as investors fear that later profits Samsung will remain at the same level or decrease. Such fears are caused by the fact that this year the growth of incomes from the production of microprocessors may slow down, namely, this division accounts for the lion’s share of the corporation’s profits.

On Friday, the South Korean technology corporation Samsung reported, that operating income in the first quarter increased by 58%, to 15.6 trillion won ($ 14.7 billion). This significantly exceeds the expectations of analysts interviewed by Reuters – they predicted an average operating profit of 14.5 trillion won.

Revenues in the first quarter amounted to 60 trillion won ($ 56.5 billion), which is 19% more than a year ago. As in the past year, much of this growth has been achieved due to the good performance of the microprocessor division – this division accounts for up to 75% of operating profit. But this is what causes concern for investors – they expect that a sharp increase in this market may soon cease.

Samsung hit a record profit

What was Samsung’s quarterly profit last year

Shares of Samsung on Friday fell by 2.7% due to the fact that, according to analysts’ forecasts, in the next quarter the profit of the corporation will remain at the same level or even slightly decrease. This may be due to a slowdown in the price growth for DRAM memory chips, as well as with significant marketing costs for the flagship Galaxy S9 smartphone. Moreover, as the analyst of the company HMC Investment & Securities Greg Roh, “although the rise in prices for memory chips has slowed after reaching a peak, lower prices can stimulate the demand for chips, in addition, Samsung is able to reduce costs to maintain the increase in profits.”

South Korea’s Ryongap agency also reported that on Friday, South Korea’s prosecutor’s office searched the Samsung Electronics Service, one of Samsung’s subsidiaries. This search is part of the investigation against Samsung on suspicion that the corporation is sabotaging the creation of trade unions in its subsidiaries.

In March, it was reported that the new smartphones Samsung Galaxy S9 and Galaxy S9 + bypassed the sales in Russia of previous models of the brand and the pre-order stage, and the results of the first three days in stores.

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