Samsung has said it’s expecting to report strong sales for the April-to-June quarter, despite the challenges brought by the ongoing coronavirus pandemic.
Beating estimates, the Korean tech titan said late Monday it’s expecting to see an operating profit of 8.1 trillion won ($6.8 billion) for its second quarter when the official figures come out later this month, marking an increase of 22.7% on a year earlier. The figure is despite an expected year-on-year drop in sales of 7.4% to 52 trillion won ($43.6 billion) for the three-month period.
So how exactly did Samsung manage to pull off the feat of scoring a strong quarter despite all of the global economic pressures caused by COVID-19?
Ironically, as demand for smartphones, televisions, and home appliances fell during lockdowns imposed by governments to slow the spread of the virus, it’s these very measures that appear to have boosted Samsung’s bottom line as an increase in remote working led to an uptick in demand for server chips. The situation also prompted the price of the chips to increase as data centers clamored to snap up extra stock in response to the recent change in work behavior.
A senior analyst at financial services company Nomura told Nikkei that Samsung’s performance started to pick up in mid-May, but said that the demand for cloud-based services as a result of stay-at-home orders is “likely to slow in the near-term,” while sales of its electronic devices, which have been hit badly in recent months, are now starting to recover. Such news will be a relief to Samsung, which is currently prepping the release of its much-anticipated Galaxy Note 20, as well as the Galaxy Fold 2 handset, and the Galaxy Watch 3.
Samsung rival Apple announced $58.3 billion in revenue for its latest quarter ending March 28, up from $58 billion a year earlier. The income was helped along by all-time quarterly records in services (including Apple Music, Apple TV+, and Apple Arcade) and wearables.
The iPhone maker’s quarterly profit came in at $11.25 billion, down slightly from $11.56 billion for the same period 12 months ago.