ECONOMY

Samsung Profit Beats Estimates as Mobile Sales Cushion Fab Loss

Samsung Electronics Co.’s profit for the first quarter beat analysts’ estimates as strong smartphone and gadget sales softened the blow from a Texas power failure that took one of its factories offline.

South Korea’s biggest company posted operating income of 9.3 trillion won ($8.3 billion) for the three months ended March in preliminary results released Wednesday. That compares with a 8.88 trillion won average of forecasts. Sales for the quarter were 65 trillion won. The company didn’t provide net income or break out divisional performance, which it will report later this month when it releases full results.

The world’s largest memory maker had warned about profitability declining in the first quarter, anticipating weakness in demand, but instead the worldwide economic rebound from the pandemic happened faster than expected and semiconductor prices are now on the rise. Still, the company’s Austin, Texas plant was suspended for more than a month by statewide power failures, leading to about 300 billion won of losses, according to analysts’ estimates. That lost output will have affected its auto parts and mid-range smartphones, said Greg Roh, a senior vice president at HMC Securities.

Read more: Chip Lead Times Stretch to 16 Weeks Indicating More Supply Angst

The Galaxy S21 family of flagship Android devices was released earlier than Samsung’s annual refresh cadence, giving its phone business a January boost. With major rival Huawei Technologies Co. derailed by U.S. sanctions, Samsung and a cohort of Chinese contenders have rushed to fill the void left in the market.

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