Samsung Electronics Co., the world's biggest technology firm by revenue, estimated Tuesday its 2014 first-quarter operating profit at 8.4 trillion won ($7.9 billion).
The preliminary estimate represents a 4.3 percent fall from the operating profit of 8.78 trillion won a year earlier, the company said in a regulatory filing.
The figure, however, marks a 1.08 percent increase from the operating profit of 8.31 trillion won posted over the September-December period of 2013.
First-quarter sales were estimated at 53 trillion won, up 0.25 percent from the 52.8 trillion won a year earlier, according to the company's earnings guidance, which did not provide figures for each of its business divisions.
Samsung, the world's leading smartphone and memory chip maker, is scheduled to announce its first-quarter earnings later this month.
The data were in line with market consensus. Analysts attributed the improved on-quarter estimate to the robust earnings in its mobile division amid the rising sales of inventories.
"While we must take a close look at the Galaxy S5, most of the improved performance of the mobile sector came from Samsung's efforts to cut costs in production," said Kim Sung-in, an analyst at Kiwoom Securities Co.
The world's No. 1 maker of smartphones is estimated to have increased its sales of inventories, lending support to the slightly improved performance for the first quarter.
Industry projection said Samsung shipped some 90 million units of smartphones worldwide over the January-March period.
"The mobile division's operating profit is expected to have reached 6 trillion won in the first quarter, compared with the 5.4 trillion won posted in the previous quarter," said Lee Seung-woo, an analyst at IBK Investment & Securities Co.
Samsung's latest smartphone also gave a last-minute boost to its mobile division's first-quarter performances, analysts said.
Samsung rolled out its latest Galaxy S5 smartphone at home on March 27, around two weeks earlier than the global launch slated for April 11.
The device, first introduced in February at the Mobile World Congress in Barcelona, Spain, comes with a 5.1-inch display, wider than the 4.99 inches of its predecessor, the Galaxy S4.
Equipped with a 16-megapixel camera, the Galaxy S5 adopted fingerprint screening and a heartbeat sensor, the first to do so in the industry, which can be connected to Samsung's smartwatches to effectively manage workouts.
The latest market data showed the daily average sales of the Galaxy S5 came to around 7,000 units at home, just slightly below the 8,000 units by its predecessor Galaxy S4 and far behind the 10,000 units for the Galaxy S4 LTE-A.
The sales were, however, considered remarkable given that only one of the country's three carriers was in full operation and that the carriers are no longer allowed to pay out subsidies to new subscribers.
The relatively low price also encouraged Samsung's sales, as the Galaxy S5's local selling price is currently fixed at 866,800 won, below the Galaxy S4's initial price of 899,000 won, despite its updated features.
Analysts said Samsung's performance is also significant as demands for electronics goods are usually weak over the first quarter, and as the latest guidance would have taken into consideration its compensation to its rival Apple Inc.
Samsung, embroiled in legal feuds over smartphone patents with Apple, is estimated to owe the iPhone maker some 300 billion won.
Analysts said, however, that Samsung's performance in its display business may have suffered a slowdown due to the falling global prices of panels.
Its semiconductor business is estimated to have remained healthy as the global price of DRAMs remained steady despite falling seasonal demand, and its consumer electronics sector is also expected to have performed well.
The South Korean tech giant is expected to see its earnings continue to gather ground down the road, with its quarterly operating profit to pass the 9 trillion won mark in the April-June period, analysts said, citing its firm gains in the mobile business and anticipated recovery of the display sector.
The Galaxy S5 is also likely to get a full-fledged boost to its earnings over the second quarter, analysts said.
Samsung's projected operating profits for the January-March period will have a limited impact on the company share prices as the figure still is far below quarterly earnings hovering above 9-10 trillion won last year, analysts said.
Samsung had posted a record-high operating profit of 10.1 trillion won in the third quarter of 2013, an advance from the 9.5 trillion won posted three months earlier. (Yonhap)