Samsung recovers from slump

galazy-SSamsung has told Wall Street that it expects January-March profit to be its highest in three quarters, beating expectations and suggesting that the tech giant is on track for an earnings recovery.

Samsung’s profit is expected to have reached $5.44 billion in the first quarter, the South Korean manufacturer said.

Investors and analysts expect the Galaxy S6 and S6 edge models  to revive handset sales and propel profits in coming quarters.

Researcher Counterpoint expects Samsung to sell more than 50 million units of the new devices to consumers this year – a new record for the company. The contribution from Samsung’s chip-making division is also tipped to be just as significant as smartphone-related income.

Chips probably sold more than phones for a third straight quarter in January-March, analysts said, as Samsung dominates in memory and grew market share for system chips. Samsung opted to use more of its own chips for its Galaxy S6 models and added chip maker Nvidia as a new contract manufacturing client.

The smartphone business likely also saw sequential shipments growth in the first quarter as new mid-tier handsets such as the Galaxy A and E models went on sale in major markets, analysts said.

For all of 2015, profit is likely to rise 6 percent and sales improving in system chips and favourable pre-sale reviews for the S6 have reversed the estimate from a profit decline forecast earlier this year.