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Investing.com-- Samsung Electronics (KS:005930) forecast a stronger-than-expected first quarter profit on Tuesday, as the South Korean technology giant benefited from better smartphone sales and improving chip demand.
Samsung said Q1 operating profit is expected at about 6.6 trillion won ($4.5 billion), much higher than Reuters estimates of 5.2 trillion won, but down 0.2% from last year.
Q1 sakes are expected at 79 trillion won, Samsung said, compared to 71.9 trillion won from a year ago.
The world’s largest memory chip maker benefited from a recovery in smartphone sales in the quarter, while fears of U.S. trade tariffs also expedited its semiconductor sales.
U.S. President Donald Trump slapped South Korea with 25% tariffs, and also threatened to impose tariffs on semiconductors, which are one of the country’s biggest exports.
Samsung likely saw a pre-emptive increase in chip shipments in anticipation of more U.S. tariffs. Trump’s 25% duty will take effect on Wednesday.
Samsung is also in the process of a management change, after co-CEO Han Jong-Hee suddenly passed away in late-March.
The company will report its full quarterly earnings later in April.
Tuesday's earnings show some improvement in Samsung's prospects, with the tech conglomerate having largely lagged chipmaking rivals SK Hynix Inc (KS:000660) and Micron Technology Inc (NASDAQ:MU) in capitalizing on an artificial intelligence-drive boom in chip demand.
Samsung is racing to manufacture advanced high-bandwith memory chips- which are a key component of AI development- at scale, although some of its HBM chips were approved by AI giant NVIDIA Corporation (NASDAQ:NVDA) earlier this year.