Samsung Expects a Decline in Profit Amid COVID-19

Samsung Electronics Co Ltd said it expected its profit to decline in the current quarter, as strength in the chip business would be offset by a sales slump in smartphones and TVs. Samsung said its first-quarter operating profit rose 3% in the January-March period, in line with an earlier estimate, as the stay-at-home trend due to the COVID-19 pandemic cushioned the virus blow.

The South Korean tech conglomerate`s chip business is benefiting from demand for servers and computers as stay-at-home orders force millions of people around the world to convert their homes into offices. But sales of TVs and smartphones have slowed as recession-wary consumers postpone purchases of non-essential consumer electronics, a trend seen across the global tech industry.

"Sales and profits of set products business, including smartphones and TVs, are expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally," Samsung said in a statement.

The world`s top maker of memory chips and smartphones reported an operating profit of 6.4 trillion Korean won ($5.2 billion), compared with 6.2 trillion won a year ago and its earlier estimate of 6.4 trillion won.