Samsung Electronics Co. Tuesday projected a 10.6 percent fall in its operating profit in the first quarter from the previous three-month period as output and sales in its finished electronics were hit by coronavirus spread despite recovery in chip demand.

According to its preliminary earnings for the first quarter ended March, Korea’s biggest tech company’s operating profit was 6.4 trillion won ($5.23 billion), down 10.6 percent from a quarter ago and up 2.73 percent from a year earlier.

Sales totaled 55 trillion won, losing from 59.88 trillion won in the previous quarter and gaining from 52.39 trillion won in a year-ago period.

Samsung Electronics shares on Tuesday rose 1.85 percent to finish at 49,600 won in Seoul.

Operating margin, which measures how much a profit a company makes on a dollar of sales, was down to 11.6 percent, the worst since the third quarter of 2016.

The numbers were more or less within expectations. According to consensus compiled by Seoul-based financial data provider FnGuide on Friday, Samsung Electronics was expected to deliver an operating profit of 6.18 trillion won on sales of 55.3 trillion won.

Prices of mainstay memory chips have improved due to easing in inventory levels and recovery in demand. The display business however is projected to have incurred an operating loss for the first time in four quarters.

But finished goods would have suffered from output disruption and lethargic demand due to the coronavirus spread that developed into a global pandemic in March. A boon for 5G smartphones and high-end TVs ahead of the Tokyo Summer Olympics was ruined as the epidemic even called off the international games.

The real toll from the virus impact is expected to tick in from the second quarter.

According to Samsung Securities, the mobile phone business is forecast to post a 54 percent fall in operating profit for the second quarter, the consumer electronics division a 70 percent drop, and the display unit a 80 percent dip.

Samsung Electronics will be releasing final and detailed statements later this month.

By Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]