Samsung's Q1 profit posts double-digit growth on smartphone sales

Samsung Electronics' first-quarter operating profit posted a double-digit growth on the back of robust sales of Galaxy S7 smartphones, launched earlier than forecast, the company said on Thursday.

Consolidated operating profit reached 6.68 trillion won (5.84 billion U.S. dollars) in the January-March period, up 11.7 percent from a year earlier. From the previous three-month period, the profit increased 8.7 percent.

It was an earnings surprise as it surpassed market expectations of about 5.2 trillion won.

Revenue rose 5.7 percent over a year earlier to 49.78 trillion won in the first quarter, and net income surged 63 percent to 5.25 trillion won.

The operating profit margin jumped to 13.4 percent, nearing to the 15 percent level which Samsung achieved when posting a record-breaking earnings several years ago.

The positive first-quarter earnings came as Samsung's mobile phone business posted the highest profit in about two years.

The smartphone unit's operating profit reached 3.89 trillion won, accounting for nearly two-thirds of the combined profit. It was up 74 percent from the previous quarter.

Operating profits of Samsung's smartphone division stayed in the range of 2 trillion won in the past years due to global market slowdown, falling below the level in the third and fourth quarters of 2014.

Samsung's Galaxy S7 and S7 Edge smartphones were released earlier than forecast in the first quarter, resulting in sales growth in the smartphone division. Low-end smartphone lineups were simplified, also helping boost profitability.