Samsung estimates record-high Q1 profit

A man walks behind a Samsung Electronics Co. light-emitting diode (LED) television at Yongsan Station in Seoul (Bloomberg)

Samsung Electronics said Friday that it estimates it will post its highest-ever operating profit at 5.8 trillion won ($5.15 billion) for the first quarter.

Analysts also gave rosy outlooks for the upcoming second quarter, expecting strong sales of the Galaxy S3 smartphones, which is planned to be released next month.

In a regulatory filing, the world’s top television and memory chip maker said it is likely to mark a 96.6 percent rise in operating profit from a year earlier and an increase of 9.4 percent from the previous quarter.

The firm also said it reached 45 trillion won in total sales, up 21.65 percent from the same period last year, but a slight decrease of 4.9 percent from the final quarter of 2011. The exact earnings figures for January-March will be unveiled later this month, possibly on April 27.

The sales figure met market expectations, but the operating profit surpassed it, exceeding its record quarterly profit of 5.3 trillion won posted in the fourth quarter of last year.

The rise in operating profit for the country’s IT behemoth was backed by the strong sales of its smartphone Galaxy series, including the success of the 5.3-inch Galaxy Note, industry watchers said.

According to the company, it has sold more than 5 million units of the Galaxy Note globally as of last month since rolling out the gadget last October.

Samsung also said last week that it sold up to 1.65 million units of the Galaxy Note in Korea, selling an average of 18,000 units of the model per day. Its flagship smartphone Galaxy S2 had also recorded 20 million units in the first 10 months of sales, its officials said.

“It’s an earnings surprise,” said Choe Sung-je, an analyst at SK Securities. “Samsung shares will continue to rise for the time being.”

Noh Geun-chang, a senior analyst at HMC Securities, also said that hot-selling smartphones were the main drivers in reaching record quarterly earnings for the company and that the release of Galaxy S3 will also contribute in the continuous rise for the second quarter.

“I’m expecting the operating profit to post over 6 trillion won in the second quarter and the profit growth driver is also the smartphone for the upcoming quarter,” he said. “Due to the popularity of its smartphone, the subparts used to make the device such as the mobile dynamic random access memory, mobile application processor and the AMOLED display screens will also see rises in profit figures.”

As the Galaxy S3 is projected to roll out in May, the new smartphone is likely to sell up to 5 million units in June alone, said Noh.

Meanwhile, shares of the company closed at 1.332 million won per share on the Seoul bourse on Friday, up 2,000 won from Thursday.

By Cho Ji-hyun (sharon@heraldm.com)