Samsung Electronics showed signs that its business is turning around after reporting a preliminary profit that beat the consensus estimate of Wall Street analysts for the first quarter of 2015.
The South Korean electronics giant posted 5.9 trillion won ($5.4 billion) in operating income, higher than the 5.3 trillion won consensus estimate.
Michael Mauboussin: Here’s what active managers can do
Samsung benefited from strong sales in memory chips
Greg Roh, an analyst at HMC Investment Securities, told Bloomberg that Samsung benefited from strong sales of memory chips for mobile devices and serves. In addition, Roh said, “Tighter marketing spending at mobile also contributed to the higher result, and second-quarter results will be a lot higher, largely helped by S6 smartphones.”
According to Samsung, its sales declined to $47 trillion won compared with the 49.8 trillion won consensus estimate. The company did not provide any detail regarding its earnings from its divisions or its net income. It is scheduled to release its audited financial results later this month.
BMO Capital Markets analyst Tim Long and Ambrish Srivastava estimated that Samsung probably sold 99 million handsets during the quarter including 80 million smartphones.
In a note to investors, the analysts wrote, “We believe the quarter tracked roughly as expected with some initial sell -in of the recently launched Galaxy S6, setting the stage for a much stronger June quarter for the mobile business.”
Samsung denied paying people to attend Galaxy S6 event
Meanwhile, Samsung denied the report claiming that it paid thousands of people to attend the launching of the Galaxy S6 in Shanghai, China. According to the South Korean electronics giant, the report was “totally groundless and bogus.”
Samsung said, “Our findings have indicated that under no circumstances has anyone been hired or given money to attend the event. In fact, the more than 1,100 attendees, including consumers and industry officials, have all been formally invited to the Shanghai Culture Square where the event took place.”
The Paper claimed that approximately 500 people received a payment of 30 yuan to attend the Galaxy S6 launch event, but eventually retracted its story because the information was false.
Separately, Samsung responded to SquareTrade’s “bendgate” claims that the Galaxy S6 Edge was deformed and crashed after putting a pressure of $110 pounds, and completely broken when the pressure reached 149 pounds. The company said SquareTrade’s claims were “seriously misleading.”
Samsung said it would like to see different tests to evaluate the phone’s durability better. The company said it will “officially deliver our statement to SquareTrade and ask them to conduct the stress test again which targets both front and back sides, and open the test result to the public.”