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Samsung aims for 10% profit bounce in Q1

Korean mobile giant Samsung forecasts a turnaround in its financial performance during the first quarter of 2016

Samsung may be on the verge of executing a sudden turnaround in its financial fortunes after predicting a rise in its quarterly operating profits.

In a brief statement released on 7 April 2016, the Seoul-based electronics and mobility giant said it expected its consolidated operating profit for the first three months of the year to come in at around 6.6tn Korean won (KRW), approximately £3.9bn.

This would be up 10% on the figures for the fourth quarter of 2015, which hit KRW26.4tn.

First quarter revenues, meanwhile, are expected to hit KRW49tn, down approximately KRW4tn sequentially.

Samsung’s figures represent the median of an estimated earnings range – meaning that the actual declared operating profit could be anywhere between KRW6.5tn and KRW6.7tn.

In 2015, Samsung received a pasting at the hands of its Chinese rivals, which have been rolling out cheaper smartphones of comparable quality in many cases, and expanding beyond their domestic markets.

Its annual profits plunged by 40% as a result of this trend, and Samsung said that maintaining its earnings through 2016 would be a challenge.

It vowed to double down on securing profitability and concentrating on reinforcing its competitiveness, alongside diversification into new and profitable areas of technology – most notably the internet of things (IoT).

Since its previous earnings announcement in January 2016, it has also launched flagship smartphones in the shape of the Galaxy S7 and Galaxy S7 Edge, both of which have been well-received by the market, although it is far too early to gauge their effect on Samsung’s fiscal health.

In March 2016, it revealed that five million people in South Korea and the US had signed up to its mobile payment system, Samsung Pay, with $500m spent in six months. The Samsung Pay service will be coming to the UK – along with Google’s Android Pay version – in the next few months.

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