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earnings guidance

Samsung expects solid first-quarter results as the Galaxy S7 enjoys strong sales

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After sounding a dour note in its last earnings report, Samsung Electronics issued unexpectedly upbeat quarterly guidance today. The company said it expects to report consolidated sales of about 49 trillion won and operating profit of about 6.6 trillion won in the first quarter of 2016.

This beats the operating profit of 5.53 trillion won analysts polled by Bloomberg had expected. Since this is earnings guidance and not its final report, Samsung Electronics didn’t say what fueled its quarterly performance, but the reason is likely the success of its flagship Galaxy S7 smartphone, which has outperformed its predecessor, the Galaxy S6.

The Galaxy S7 not only earned praise for combining the best features from previous models, but benefited from an earlier release and the convenient fact that rival smartphone makers like Apple, Huawei, and Xiaomi were in between new releases.

Samsung had said in January—before the S7 started taking pre-orders—that it expects flat results during the first two quarters of 2016 because of economic issues and a slower IT market.

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