Samsung, the South Korean tech giant, has reported a significant increase in profits for the first quarter of 2024, with preliminary results indicating a year-on-year increase of 931 percent. This marks Samsung’s highest quarterly profit in 18 months, surpassing the KRW 6.57 trillion ($5 billion) reported in Q4 2023.
The surge in profits can be attributed to the recovery of Galaxy phone shipments and the rising demand for memory chips. Samsung’s consolidated sales for Q1 2024 are estimated to be around 71 trillion Korean won ($52.5 billion), a significant increase from the 63.75 trillion won reported in Q1 2023.
The company’s operating profit for Q1 2024 is expected to be approximately 6.6 trillion Korean won ($4.9 billion), a massive improvement from the KRW 0.64 trillion reported in Q1 2023. This increase in profits is a result of Samsung’s ability to generate more revenue from the same number of products sold worldwide, despite the record-setting profit scores of a few years back still being out of reach.
Looking ahead, Samsung is optimistic about its future growth, with global memory chip demand predicted to stay steady and Galaxy S24 series sales continuing to boom worldwide. However, there are some challenges, such as the ongoing macroeconomic uncertainties and the slow recovery of foldable handset shipments.
In the fourth quarter of 2023, Samsung reported a 34.57 percent drop in operating profit from the previous year, in line with its guidance. The company’s semiconductor business suffered a record loss of 14.88 trillion Korean won ($11.4 billion) due to weak global demand.
Despite these challenges, Samsung is focusing on increasing sales of high-value-added products to improve profitability. The company is leveraging its new, AI-enabled Galaxy S24 smartphones, which are set to launch in Q1 2024, to boost sales and establish itself as the leading brand in the AI smartphone market.
In summary, Samsung’s financial performance in 2023 was disappointing, with the company finishing the year behind Apple in global handset sales and reporting a worryingly low overall profit score. However, with the recovery of Galaxy phone shipments and the rise in memory chip prices, Samsung is experiencing a significant increase in profits for the first quarter of 2024. The company is optimistic about its future growth, but also faces challenges such as macroeconomic uncertainties and the slow recovery of foldable handset shipments.