Samsung Galaxy S7 gives big contribution to first quarter earnings

Samsung Electronics announced its first quarter earnings and reported operating profits of $5.81 billion, while its Mobile Communications division has $3.38 billion in profits. In the first quarter of 2014, the IM division contributed 70 percent of the firm's profits, largely from the sales of the Galaxy Note and S devices. Samsung's profits dropped big time when Apple released its flagship duo iPhone 6 and 6 Plus in 2014, and suffered a 73.9 decline of its mobile profits compared to the previous year. Since then, the South Korean original equipment manufacturer has struggled to get back to its smartphone profitability. However, the recently announced financial results showed an improvement of the IM division earnings both quarter-on-quarter and year-over-year, due to the early launch of Galaxy S7 as well as improved cost efficiency through streamlining phone lineups. The South Korean tech titan settled a one-time royalty in the quarter, but it was only less than a percent of the IM revenue, the company said via a press release on April 28, Thursday.



Samsung's IM division is the world's largest smartphone maker and the most profitable competitor of Apple. A flat demand for Samsung tablets and smartphones is expected to continue until the June quarter as the company focuses on global expansion of its S7 sales and maintains solid profitability of its other products, Apple Insider reported. Other contributors of Q1's profits are divisions like the Consumer Electronics and the DS division. The South Korean firm's CE group is in charge for appliances and TVs, while the DS division is responsible for display panels, memory components and semiconductors. The CE group achieved earnings growth year-over-year because of the sales of premium TVs, as well as of the home appliances in North America. The Systems LSI Business experienced a decline of quarter-on-quarter earnings but an increase of its year-over-year, thanks to the soaring demand for 14nm products. Meanwhile, the LCD panel earnings declined sharply, affecting the earnings of the Display Panel division where it belongs. The LCD is still adopting a new process tech while the price of the TV panel plummeted. However, earnings of the OLED panels improved due to the soaring demands of the Galaxy S7.
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