Samsung profits jump 14% on success of Galaxy S7 smartphone

Samsung Electronics, the world’s largest smartphone maker, has recorded better than expected first quarter profits thanks to the successful early release of its new flagship Galaxy handset.

The result will encourage shareholders after a disappointing 2015 that saw Samsung lose more than $8bn in market value, with its smartphone business sandwiched by top-end rivals like Apple’s iPhone and lower-end devices from fast-growing Chinese outfits like Huawei and Xiaomi.

In an effort to defend its smartphone share, Samsung rolled out the latest version of its Galaxy S7 smartphone in March – a month earlier than the previous year and ahead of new launches by its competitors.

Boasting an improved camera, waterproofing and microSD storage support, Galaxy S7 models are on track to set a new first-year shipments record, boosting hopes the mobile business will post its first annual profit gain in three years.

“The first quarter saw overall earnings growth led by the early launch and successful sales of the flagship Galaxy S7 and S7 edge,” the South Korean company said on Thursday.

Net income for the January-March period stood at 5.25 trillion won ($4.56 billion), up 14.1% from 4.63 trillion won in the same quarter last year.

The first quarter figure was higher than the 4.42-trillion-won average of estimates compiled by Bloomberg News.

The strong Galaxy S7 performance came in the face of a flattening global smartphone market that saw arch-rival Apple on Tuesday report its first-ever drop in iPhone sales since launching the iconic handset.

Apple reported net income of $10.5bn in the fiscal quarter to March 26, down from $13.6bn last year.

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