Samsung Hits Record Profit In Q1 But Warns About Display Panel Problems

Samsung posted its best operating profit ever in its first-quarter 2018 earnings results, but the manufacturer also had other news: A slowdown is looming for its display panel unit, which makes organic light-emitting diode screens for its own smartphones and Apple’s iPhone X.

Sluggish demand for those screens, commonly called OLED, depressed display unit profits in the first quarter, a trend that Samsung expects to continue in the coming months. Increased competition also played a role in the segment’s flat profits and 3 percent increase in revenue.

“Generating overall earnings growth across the company will be a challenge due to weakness in the Display Panel segment and a decline in profitability in the Mobile Business amid rising competition in the high-end segment,” Samsung said in a statement, according to news from Reuters.

Amid the uncertainly, though, first-quarter operating profits — 15.64 trillion Korean won ($14.5 billion) — stood out, representing a 5.8 percent year-over-year jump and beating some analysts’ expectations. Samsung’s consolidated revenue increased 20 percent year over year, hitting 60.56 trillion Korean won ($56.7 billion).

Samsung largely credited that jump in revenue to a 43 percent year-over-year sales increase in its memory chip segment and higher sales of its prime smartphones, including the Galaxy S9, following a continuation of favorable market conditions as well as strong server demand, the company said in a statement. Additionally, Samsung said solid demand for its DRAM and NAND memory chips will continue in the coming months from data centers and smartphones.