Samsung Electronics’ Earnings Call: Record Revenue Amid Challenges

Samsung Electronics Co. Ltd. ((SSNLF)) has held its Q1 earnings call. Read on for the main highlights of the call.

Samsung Electronics’ latest earnings call revealed a balanced sentiment, highlighting both significant achievements and notable challenges. The company reported record revenue and operating profit, alongside substantial R&D investments and recognition for sustainability efforts. However, these positives were tempered by difficulties in the semiconductor and display markets, exacerbated by global trade tensions and tariff policies.

Record Revenue Achieved

Samsung Electronics reported an all-time high quarterly revenue of KRW 79.14 trillion, marking a 4% increase quarter-on-quarter. This achievement was largely driven by the DX division, which saw a 28% rise in revenue due to strong sales of flagship smartphones and high value-added home appliances.

Operating Profit Increase

The company’s operating profit increased by KRW 0.2 trillion to KRW 6.7 trillion. This growth was supported by robust sales of the Galaxy S25 series and high value-added products in the Visual Display and Digital Appliances sectors.

Sustainability Achievement

Samsung was recognized for its sustainability efforts, ranking first in a supply chain human rights assessment by Know the Chain. This accolade reflects the company’s improved supply chain due diligence and expanded protections for migrant workers.

R&D Investment Reaches New Heights

Samsung emphasized its commitment to innovation with record-high R&D investments in 2024, marking a 16% year-on-year increase in Q4. This investment underscores the company’s focus on future growth and technological advancement.

AI and Robotics Growth

The company is actively pursuing growth in AI and robotics, aiming to surpass competitors through both internal development and strategic external partnerships.

Increased Shareholder Returns

Samsung announced a quarterly per share dividend of KRW 365, culminating in a total annual dividend of KRW 9.8 trillion. Additionally, a KRW 10 trillion stock repurchase plan was unveiled to enhance shareholder value.

Decline in DS Division Revenue

The DS division faced a 17% revenue decline, impacted by decreased HBM sales due to deferred customer demand and export controls on AI chips.

Challenges in Semiconductor Market

The semiconductor market is experiencing heightened uncertainties due to global trade tensions and economic slowdown, raising concerns about demand volatility.

Foundry Business Profitability Concerns

Samsung’s foundry business is grappling with profitability challenges, as declining utilization rates and rising fixed costs persist amid global economic uncertainties.

Mobile Display Market Uncertainties

The mobile display business is facing external uncertainties, including changes in tariff policies, which are affecting its performance outlook.

TV Market Competition

Samsung’s TV market profitability declined year-on-year due to stagnant demand and increased costs driven by intense competition.

Forward-Looking Guidance

Looking ahead, Samsung Electronics projects continued revenue growth, with a 4% quarter-on-quarter increase in Q1 2025, driven by the DX division’s performance. However, challenges remain in the DS division due to declining HBM sales. The company anticipates an operating profit increase, supported by reduced SG&A expenses and favorable currency effects.

In conclusion, Samsung Electronics’ earnings call reflects a mixed outlook, with record achievements in revenue and sustainability balanced by challenges in key markets. The company’s strategic focus on R&D and shareholder returns positions it well for future growth, despite ongoing uncertainties in the semiconductor and display sectors.