Strong smartphone sales boost Samsung to $7.9 billion profit in Q1 2013

Samsung Electronics made an operating profit of 8.78 trillion won ($7.9 billion) in the first quarter of 2013, matching its guidance and representing a more than 50 percent improvement on its performance last year. Revenues were 52.87 trillion won ($47.6 billion), and net profit was 7.15 trillion won ($6.45 billion). The company said strong smartphone sales coupled with reduced marketing expenses helped boost its IT & Mobile Communications division to revenues of 32.82 trillion alone. However, Samsung's revenues were hit by seasonality — the company took in 6 percent less cash than in the previous quarter — and what it describes as a sluggish economy that meant lower TV and home appliance sales.

“We may experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market," said Senior Vice President and Head of Investor Relations Robert Yi, "while TV growth will continue to wane in developed markets.” However, Samsung expects a "marginal boost" in TV sales in the next quarter driven by high-end products such as 4K sets. This month's much-anticipated launch of the Galaxy S4 will make a large impact on Samsung's next quarter, too, though the company warns of increased competition and lower global demand for smartphones.