Samsung profits soar 50% on chip sales

Hong Kong(CNN Business) Samsung reported strong results on Thursday, with profits for the first quarter climbing more than 50% compared to the same time a year ago.

The South Korean tech giant pulled in 77.8 trillion Korean won ($61.3 billion) in revenue and 14.1 trillion Korean won ($11.1 billion) in operating profit, roughly in line with its own forecast earlier this month.

The solid earnings are attributed to sales of its memory chips, which were up nearly 40% year-on-year, taking in approximately 20.1 trillion won ($15.8 billion).

Samsung's mobile division also benefited from strong sales of its newest lineup of smartphones, which it said "centered on" the flagship Galaxy S22 Ultra. The models were launched at a splashy event in February.

But the electronics maker also warned that headaches over long-running supply chain issues would "persist," leading to component shortages for its devices. The company said it would continue to focus on efforts to shore up its stock of chips and image sensors this year.

Samsung (SSNLF) also flagged that it expected weakened consumer sentiment for smartphones due to "prolonged geopolitical conflicts and lockdowns in some areas."

Research provider Canalys has pointed to a softening global smartphone market, with "an unsettled business environment" in the first quarter, according to the firm's vice president of mobility, Nicole Peng.

In a report last week, she noted that "vendors face major uncertainty due to the Russia-Ukraine war, China's rolling [Covid-19] lockdowns and the threat of inflation. All this added to traditionally slow seasonal demand."

Still, Samsung led worldwide sales in the first quarter, beating out Apple (AAPL), according to Canalys.

Samsung stock was down 0.5% in Seoul on Thursday morning.