Samsung Electronics flags 10% rise in Q1 profit

Samsung Electronics on Thursday posted a better-than-expected 10 percent increase in first quarter profits, on robust sales of the South Korean electronics giant's new Galaxy S7 smartphone.

The world's largest smartphone producer said operating profit in the January-March period was expected to reach around 6.6 trillion won ($5.6 billion), up from 6.0 trillion won a year ago.

The profit figure was substantially higher than the 5.53 trillion-won average of analysts' estimates compiled by Bloomberg News, and up from the 6.1 trillion won posted in the fourth quarter of 2015.

The result will encourage shareholders after a disappointing 2015 that saw Samsung lose more than $8.0 billion in market value, with its flagship 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 flagship Galaxy smartphone in March -- a month earlier than the previous year and ahead of new launches by its competitors.

The combined shipments of the Galaxy S7 and Galaxy S7 Edge are estimated to have reached 10 million units within 20 days after the launch.

At the same time, the South Korean won has weakened against the dollar, providing a pricing edge for exports.

Samsung estimated overall sales for the first quarter at 49 trillion won, up from 47.1 trillion won a year before.

Thursday's forecast, which comes ahead of audited results to be released this month, did not provide a net income figure or breakdown of divisional earnings.