Samsung’s first-quarter profit beats analysts’ expectations

Samsung Electronics will publish detailed financial statements for the first quarter of this year only at the end of this month, but preliminary results for the period have already been released. Operating profit, although not much changed in a year-on-year comparison, exceeded analysts’ expectations, and the company’s revenue grew by 10% to $53.7 billion.

Image Source: Samsung Electronics

As analysts note, the growth in revenue was facilitated by the threat of increased customs duties in the United States, as well as the revival in the smartphone market, which was expressed in good demand for the latest models of the Galaxy S25 family, presented in January. Samsung’s operating profit formally decreased by 0.2% year-on-year to $4.49 billion, but such relative stability in the difficult operating conditions of the company made a favorable impression on investors, the stock market ultimately responded to the publication of Samsung’s financial statements by increasing the company’s share price by 2.6%. On average, analysts expected an operating profit of $3.5 billion, so the reality turned out to be better than expected.

Prices for memory chips, which form the bulk of Samsung’s revenue, fell last quarter, and the company still cannot boast of large volumes of HBM supplies. It is believed that for about 18 months in a row it has been trying to integrate into the HBM3E supply chain for Nvidia’s needs, but it has not been able to certify this type of product to its requirements. The situation is aggravated by growing losses in the contract direction of Samsung’s semiconductor business.

Meanwhile, rival SK hynix has already started shipping HBM4 samples to its customers, chief among them Nvidia, but Samsung is now faced with the task of getting HBM3E certified to that customer’s requirements, although that Korean manufacturer is also rushing to bring HBM4 to market.

The tariffs imposed by Trump in the US will have different impacts on the activities of Samsung Electronics. The company produces most of its smartphones in Vietnam, imports from which to the US will be taxed at a rate of 56%. Chinese products in the basic version should be subject to a duty of 54%, but Trump has already threatened to increase the rate to 104% if the Chinese side takes retaliatory tariff measures. Samsung produces household appliances, including televisions, for the US market in Mexico, which has so far gotten off relatively lightly in terms of import duties for the American market. Its products will be taxed at a rate of 25%, but in general, the relationship between the American administration and its southern neighbor can hardly be called smooth.

Following Apple’s example, Samsung could also set up assembly of electronic devices in Brazil to import them to the US. However, this would take some time and some investment, so it is too early to talk about the viability of such a logistics optimization scheme. Last quarter, Samsung was helped by the desire of electronics manufacturers to stock up on memory chips in anticipation of increased import tariffs in the US. In the local market, some consumers were definitely stocking up on smartphones of this brand, expecting a price increase in April. A decline in this area is inevitable in the second quarter. In addition, according to Meritz Securities, last quarter the profit of Samsung’s semiconductor division could have halved to $543 million due to losses in the contract business. In March, company representatives expressed hope that in the second half of the year, financial indicators would be supported by an increase in sales of smartphones and memory for data centers. The latter factor will be largely determined by the relationship between Samsung and Nvidia.