Samsung Sets Its First Quarter Profit Jump, But Did The Company Reach Its Earnings Peak?
By Samir Ghanmi | Apr 08, 2016 04:12 AM EDT
On Thursday, Samsung indicated its first quarter profit jump by 10% showing a strong market sales for its Galaxy S7 smartphones, but it's still uncertain to whether the company can maintain momentum among new offerings from their rival.
According to TechCrunch, Samsung's proximity to its first quarter of controlled profits conveniently overcame the forecast of its market, as the striving mobile business managed to improve hoping to post its first annual profit earn in three years, as well as the improvement in performance for its mid-to-low line of devices and the company's effort to implement its measures in order to reduce expenses and improve profitability.
Samsung stated that somewhere around January and February, the company's operating profit was likely to reach $5.53 billion in gain.
Several brokers suggested that since late March, Samsung's earnings was encouraged better than they expected due to its Galaxy S7 models that has provided an improved camera, support of microSD storage and waterproofing. And for the first time in seven years, the company has earned a top spot in mobile business.
A decrease in the company's advantage can still also raise its first quarter profit. Although Samsung still faces challenges from new product offerings such as Apple which they recently released its iPhone SE along with Huawei's latest P9 flagship smartphone.
HMC Investment analyst Greg Roh explained that the mobile business's marketing costs will increase in the next quarter while decreasing its profits. He added, "First quarter earnings will be the peak this year."
According to TechTimes, investors are alerted due to the Galaxy S6's launch last year that provided major changes in design and features and was praised all around. Although Samsung's initial release of the S6 proved to be its best-selling smartphone, sales went flatline after the launch.
Alpha Asset Management fund manager C.J. Heo said, "S7 sales popped in the beginning but could very well fade as rivals launch new models. We have learned from the past." Samsung's initial release of the Galaxy S7 models a month earlier than their previous models might suggest to bring sales ahead that would have reached in the nearby quarter.
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