Samsung expected to post solid Q1 earnings despite Coronavirus situation

Samsung is going to announce its earnings guidance for Q1 2020 next week. Analysts expect the company to post solid earnings despite the ongoing Coronavirus pandemic. Even though the Galaxy S20 series didn’t take off as well as the South Korean firm had expected, chip sales are believed to make up for the losses in the smartphone division.The company is expected to clock in KRW 55.3 trillion ($44.9 billion) in revenue during Q1 2020, which is 5.5 percent up from the same quarter in the previous year. However, operating profit is estimated to drop 0.09 percent to KRW 6.22 trillion ($5 billion). These numbers have been verified by 21 brokerages in South Korea.Analysts say that Samsung’s semiconductor business will keep the company stay afloat due to the increase in sales of memory and storage chips for servers. The prices of these chips have been steadily improving as well. It is believed that Samsung’s electronics, smartphone, and TV sales have taken a big hit due to the COVID-19 situation.Hana Financial Investment estimates that Samsung’s smartphone sales during Q1 2020 would be around 62.2 million units, down from 71.5 million units from the previous year. Samsung Display, which makes LCD, QLED, and OLED display panels, has taken a huge hit due to slump in smartphone and TV sales. TV sales dropped due to the postponement of major sporting events such as the Tokyo Olympics and the UEFA championship.Analysts believe that the smartphone sales slump will remain until Q3 2020 and the numbers will start rising in the fourth quarter of the year. In Q2 2020, sales of semiconductor chips are expected to decline. The company had to close its chipset, smartphones, and TV factories across the world.