Seoul, South Korea - Samsung Electronics reported double-digit increases in revenues and operating profits for the first quarter, ended March 31.
Revenues in the quarter were 45.27 trillion Korean won on a consolidated basis, a 22 percent increase year on year.
For the quarter, Samsung's operating profit reached an all-time high of 5.85 trillion won, representing a 98 percent increase year on year. Consolidated net profit for the January through March period was 5.05 trillion won.
Despite a decrease in sales of semiconductor chips and TVs due to seasonal factors, an increase in profitability in display panels and mobile phones pushed up quarterly operating profit margins by 1.7 percentage points to 12.9 percent.
Samsung's strong performance in the quarter was driven mainly by the IT & mobile communications segment, which is comprised of four businesses: mobile communications, telecommunication systems, IT solutions and digital imaging. In particular, solid growth in the mobile communications business, with brisk sales of flagship Galaxy Note and Galaxy S II devices contributed to the company's profitability.
The consolidated operating profit for IT and mobile communications businesses reached 4.27 trillion won on revenue of 23.22 trillion won. The display panel business rebounded in the first quarter with operating gains of 280 billion won, following an uptick in demand for high-margin panels used in tablets, 3D/ LED TVs and premium OLED panels.
Operating profit for the display panel business turned around from the previous quarter to register 280 billion won on revenue of 8.54 trillion won in the first quarter.
Despite traditionally weak seasonality, continued economic stagnation in Europe and the prolonged supply shortage in the PC industry, the display panel business was able to improve profitability by expanding sales of high-end premium panels, such as LED TV and 3D panels, which pushed TV panel sales up in the mid-20 percent range on-year. Increased sales of high-resolution panels for tablet PCs and OLED panels for smartphones also helped boost profit in the quarter, Samsung said.
Moving forward with the establishment of Samsung Display Corporation, the company said it will continue to enhance profitability by expanding sales of premium panel products such 3D, large-size and LED panels, while smartphone demand is expected to continue to fuel OLED panel sales.
The IT and mobile communications division registered quarterly operating profits of 4.27 trillion won for the first period. Revenue reached 23.22 trillion won, and the mobile unit accounted for 18.90 trillion won, up 86 percent year on- ear.
Growth in shipments of Samsung's flagship Galaxy Note and Galaxy S II and other premium mobile devices yielded high returns, with significant growth in China, Central and South America, the Middle East and Africa. Samsung is expected to continue its strong growth momentum in the second quarter, following the announcement of the next Galaxy device in London on May 3.
Samsung's consumer electronics businesses, which encompass visual display and digital appliances, registered an operating profit of 530 billion won in the quarter, up 550 percent year on year, on revenues of 10.67 trillion won.
Although weak seasonality led to a quarter-on-quarter dip in revenue, strong sales of premium TVs in developed markets and LED TVs in emerging markets saw shipments outstrip market growth and drive a sharp increase in profitability. Highlights for the quarter included an increase in sales of more than 50 percent for Samsung's flagship 7000/8000 TV series on-year, while the digital appliances business improved profitability, both on-year and on-quarter, by increasing its portion of premium product sales.
In the second quarter, market growth for flat panel TVs in the mid-single digits is expected on rising demand in emerging markets and increased sales of LED TVs which are forecast to account for more than 60 percent of the TV market in the quarter, the company said.