Samsung registers Q1 operating profit of W8.4 trillion

Tech giant Samsung Electronics Co. estimated Tuesday its 2014 first-quarter operating profit at 8.4 trillion won ($7.9 billion).

The preliminary estimate represents a 4.3 percent fall from the operating profit of 8.78 trillion won a year earlier, the company said in a regulatory filing.

The figure, however, marks a 1.08 percent increase from the operating profit of 8.31 trillion won posted over the September-December period of 2013.

First-quarter sales were estimated at 53 trillion won, up 0.25 percent from the 52.8 trillion won a year earlier, according to the company's earnings guidance, which did not provide figures for each of its business divisions.

Samsung, the world's leading smartphone and memory chip maker, is scheduled to announce its first-quarter earnings later this month.

The data was in line with market consensus. Analysts attributed the improved on-quarter estimate to the improved earnings by its mobile division amid the earlier-than-expected home release of its latest smartphone.

"The mobile division's operating profit is estimated to have reached 6 trillion won in the first quarter, compared to the 5.4 trillion won posted in the previous quarter," said Lee Seung-woo, an analyst at IBK Investment & Securities Co.

Samsung rolled out its latest Galaxy S5 smartphone at home last month, two weeks earlier than the global launch slated for April 11.

The device, first introduced in February at the Mobile World Congress in Barcelona, Spain, comes with a 5.1-inch display, wider than the 4.99 inches of its predecessor, the Galaxy S4.

Equipped with a 16-megapixel camera, the Galaxy S5 adopted fingerprint screening and a heartbeat sensor, the first to do so in the industry, which can be connected to Samsung's smartwatches to effectively manage workouts.

The latest market data showed the daily average sales of the Galaxy S5 came to around 7,000 units at home, just slightly below the 8,000 units by its predecessor Galaxy S4 and far behind the 10,000 units for the Galaxy S4 LTE-A.

The sales were, however, considered remarkable given that only one of the country's three carriers was in full operation and that the carriers are no longer allowed to pay out subsidies to new subscribers.

The relatively low price also encouraged Samsung's sales, as the Galaxy S5's local selling price is currently fixed at 866,800 won, below the Galaxy S4's initial price of 899,000 won, despite its updated features.

Samsung is also estimated to have increased its sales of inventories, lending support to the slightly improved performance for the first quarter.

Analysts said, however, that Samsung's performance in its display business may have suffered a slowdown due to the falling global prices of panels.

Samsung's projected operating profits for the January-March period will have a limited impact on the company share prices as the figure still is far below quarterly earnings hovering above 9-10 trillion won last year, analysts said.

Samsung had posted a record-high operating profit of 10.1 trillion won in the third quarter of 2013, an advance from the 9.5 trillion won posted three months earlier. (Yonhap)