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Galaxy boosts Samsung's fortunes
A surge in Galaxy smartphone sales has fuelled earnings at Samsung Electronics to a record high in the first quarter, usually a tough season for the global consumer electronics industry, outshining handset rivals such as Nokia.
Samsung sold more smartphones in the first three months of the year than Apple and raked in more than 70% of its operating profit from mobile businesses. Shares of Samsung Electronics shot up nearly 3%.
Net profit nearly doubled from a year earlier to a record 5.05 trillion won (£2.8 billion) for the fiscal quarter ended March 31.
Operating profit also logged a record high: 5.85 trillion won, which was in line with the company's guidance provided earlier this month. Sales rose 22% from a year earlier to 45.3 trillion won.
Strong demand for high-end smartphones, such as the Galaxy Note and the Galaxy S2 introduced last year, helped mask lower profit from memory chips, another Samsung flagship business.
"It was a shock for semiconductor, a surprise for handset," said Lee Ka-keun, a Seoul-based analyst at Hana Daetoo Securities.
The Suwon, Korea-based company expects to outdo its record profit in the coming quarters. It will announce a new version of the Galaxy phone next week and global demand for personal computers is picking up, bringing more cash to memory chip makers.
"We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced," Robert Yi, head of investor relations, said on a conference call.
Samsung's mobile communications division, which includes smartphones, pocketed 4.27 trillion won of operating profit in the quarter after seeing significant sales growth of high-end smartphones in developing markets including China, a key battlefield for mobile phone makers.
After narrowly beating Apple last year, Samsung's smartphone sales exceeded Apple's by a large margin in the first quarter. Strategy Analytics said Samsung became the world's top smartphone maker, selling 44.5 million handsets in the January-March period, followed by Apple's 35.1 million.