(Yonhap)
Samsung Electronics Co.’s first-quarter operating profit could exceed 50 trillion won ($33.11 billion), surpassing last year’s total operating profit of 43 trillion won, according to market estimates ahead of preliminary results expected on Tuesday.
According to the securities industry on Friday, the consensus estimate for Samsung Electronics’ first-quarter performance is 116 trillion won in revenue and 36.8 trillion won in operating profit.
Profit expectations have risen sharply in recent months, with forecasts nearly doubling over the past three months.
On Friday, Meritz Securities Co. projected in a report that Samsung Electronics’ quarterly operating profit would reach 53.9 trillion won and Citigroup Global Markets Inc. also estimated 51 trillion won. Meritz set a target price of 250,000 won and Citi 300,000 won.
Shares of Samsung Electronics rose 4.37 percent to close at 186,200 won. If realized, quarterly profit would exceed the company’s full-year 2025 operating profit of 43.6 trillion won.
The upward revisions reflect stronger expectations for the semiconductor division.
Both Meritz Securities and Citigroup Global Markets estimate that the Device Solutions (DS) division’s quarterly operating profit will exceed 48 trillion won. This implies that the DS division alone could generate roughly double the company’s previous full-year operating profit in just one quarter.
Memory chip prices rose sharply in the first quarter.
Citigroup Global Markets estimates that the average selling prices of DRAM and NAND rose by 64 percent and 63 percent, respectively. Increasing demand for AI inference has driven up not only DRAM but also NAND flash prices.
“Based on strong pricing power in memory, resistance to price increases has not emerged easily,” said Meritz Securities Analyst Kim Sun-woo. “Outstanding earnings, combined with shareholder return policies, are expected to drive a re-rating of Samsung Electronics’ stock.”
Outlooks for future operating profit are also being rapidly revised upward.
Meritz Securities projects quarterly operating profit of 73 trillion won in the second quarter, 90 trillion won in the third quarter, and 104 trillion won in the fourth quarter, bringing the annual total to 321.7 trillion won. Citigroup Global Markets forecasts about 310 trillion won.
Losses in Samsung’s foundry business are narrowing, supporting overall profit. The 4-nanometer process used to produce base dies for HBM4 supplied to Nvidia Corp. and Groq Inc.’s language processing units is operating at utilization rates above 80 percent. Losses at the System LSI and foundry businesses, about 2 trillion won per quarter last year, are expected to narrow to around 1 trillion won.
A key uncertainty is weaker earnings in the Device eXperience (DX) division, which includes smartphones, TVs and home appliances. Citigroup Global Markets expects operating profit in the Mobile Experience (MX) division to fall to 2 trillion won in the first quarter, about half the level a year earlier, while Meritz Securities forecasts 4 trillion won.
Both firms expect MX operating profit to drop below 1 trillion won from the second quarter as higher memory costs weigh on margins and smartphone shipments decline. A sustained drop from its typical annual level of at least 10 trillion won could weaken overall earnings stability.
An escalation of the Iran conflict could also pose risks by triggering stagflation, potentially reducing global demand for consumer electronics and reversing gains in memory chip prices.
SK hynix Inc. is also expected to post record quarterly earnings.
Hana Securities Co. on Thursday raised its first-quarter estimate for SK hynix to 53.5 trillion won in revenue and 36.9 trillion won in operating profit. SK hynix is scheduled to report first-quarter earnings later this month.
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