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Technology – Samsung Q1. Forgotten jewel
Samsung reported good results with profitability bolstered by both handsets and semiconductors.Q1 16 revenues/EBIT were approximately KRW 49tn/KRW 6.6tn nicely ahead of consensus at KRW 48.8tn/KRW 5.5tn and our estimates at KRW 48.8tn/KRW 5.5tn. The initial figures for the Galaxy s7 look to have been much stronger than the Galaxy s6 mainly as a result of its lower price. The s7 was also available a month earlier than the s6 giving it more time to have a positive impact on the Q1 16 figures. Although all of the attention is being placed on the handset business, we suspect that Device Solutions also contributed to the better than expected figures. Samsung has reported revenues very close to our forecasts so the improvement in profit has all been about an improvement in margin.
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