Samsung Electronics Co on Wednesday said its operating profit for the first three months of 2020 rose 3.4 percent from a year earlier driven by increasing demands for computer chips.
However, the company predicted its profit would decline in the current quarter with the coronavirus pandemic eating into global sales of smartphones, TVs and other products.
The South Korean technology giant said it reported an operating profit of 6.4 trillion won ($5.2 billion) for the January-March quarter. The company's revenue rose 5.6% from a year earlier to 55.3 trillion won ($45.4 billion).
Samsung, which has dual strength in parts and finished products, has seen the demand for chips used in computers and servers increase as broadening outbreaks have force more people around the world to work from home.
However, the company said its profit will likely decline in the April-June quarter with the pandemic pushing down the sales of mobile and household devices.
"Sales and profits of set products business, including smartphones and TVs, are expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally," the company said in a news release.
"Memory demand is expected to remain robust for servers and PCs as more people work from home, but it is possible the mobile market may soften. Earnings from OLED screens are likely to be weaker due to a stagnant smartphone market," it said.
Google has reported lowest revenue growth in nearly five years as the pandemic-driven recession began to shrivel its advertising sales in the first quarter.
The January-March earnings for Google parent Alphabet offer a first look at how the digital ad market has fared amid widespread orders requiring consumers to stay at home. Those restrictions have given most advertisers little incentive to market their products and services.
The results released Tuesday provide an incomplete picture because ad demand in most parts of the world wasn't hit hard until late February and early March. That's when the coronavirus outbreak accelerated and governments imposed lockdowns to fight it.
Alphabet CEO Sundar Pichai acknowledged during a conference call that the company's ad sales had been "significantly impacted" during March and that the pain has spilled into this month, too. But both Pichai and Alphabet's chief financial officer, Ruth Porat, emphasized that people are using Google's search engine and YouTube video service more than ever under stay-at-home restrictions, a trend that could lead to long-term gains once the economy recovers.
For now, though Alphabet is feeling a financial pinch, although not as severely as most companies.
Alphabet's first-quarter revenue increased 13% from the same time last year to $41.2 billion. While most companies would celebrate that kind of growth, it's a significant slowdown for Google, which has regularly generated quarterly revenue gains of 20% to 25%.
The company's revenue growth hasn't been this low since the summer of 2015, before Google created Alphabet as a new holding company for itself and a hodgepodge of small, risky tech ventures.
The performance announced Tuesday was still slightly better than revenue of $40.8 billion projected by analysts surveyed by FactSet Research.
Alphabet earned $6.8 billion during the quarter, a 2% increase from last year. The company's stock climbed 8% to $1,336.98 in after-hours trading. If the shares follow a similar trajectory in regular trading on Wednesday, they will be about 10% below the peak they reached in February.
"Things don't sound quite as bad as some people had feared," said Edward Jones analyst David Heger.
Facebook, the second largest seller of digital ads behind Google, is expected to also disclose a dramatic slowdown on Wednesday when it's scheduled to release its January-March numbers.
The current April-June quarter is expected deliver even grimmer news, given that major advertisers such as airlines, hotels and other travel-sensitive businesses have little reason to reach consumers unable or unwilling to take usual summer vacations.
"We anticipate the second quarter will be a difficult one for our advertising business," Porat said during the conference call.
Neither Alphabet nor Google have ever issued guidance on future results, and they company isn't deviating from that practice now. Stock-market analysts, however, are projecting Alphabet's second-quarter revenue will be flat, with a slight uptick anticipated later this year.
A no-growth quarter would be unprecedented for Google. Its most lackluster showing so far came more than a decade ago in the midst of the Great Recession when revenue during the second quarter of 2009 rose by a paltry 3%.
Even as its revenues slow, Google remains a moneymaking machine, thanks to how deeply ingrained its search engine, digital maps, Gmail and YouTube video services are in people's lives. YouTube fared particularly well in the first quarter; its revenue increased 33% from the same time last year, although Porat said the gains tapered off dramatically for the video site during March, too..
Demand for all kinds of online services also helped bolster the company sales of services that help operate websites. Google's cloud-computing division posted a 52% revenue increase.
But advertising tied to search results remains the company's financial engine, and it is sputtering along with the rest of the economy. Revenue from Google's search engine rose 9% during the first quarter, and presumably has deteriorated further since the end of March.
To help cushion the financial blow, Pichai has already curtailed the company's hiring plans for the rest of the year and also is slashing the marketing budget to promote its own products and services. In addition, he disclosed on the conference call that the company will stop spending so much on additional office space as part of an effort to "recalibrate the focus and pace of our investments."
The challenges facing Google are a downside of running a business built on offering free digital services paid for by ads. That model is more vulnerable to economic turbulence than to others based on paid subscriptions that people still value in tough times.
That has been particularly true for video streaming service Netflix and video meeting service Zoom. Both of those Silicon Valley companies have been thriving during a crisis that has left millions of people trying to find ways to entertain themselves and still see their family, friends and co-workers.
Coca-Cola in Bangladesh has committed an initial support package worth TK 11.5 crores (115 million) towards propping up the healthcare system and helping communities through distribution of food packages and beverages to combat the local outbreak of the coronavirus pandemic.
The relief programs initiated by Coca-Cola in Bangladesh (CCB) aim at benefitting and positively impacting over 50 lakh lives across the country, said a press release.
CCB has adopted a purpose-driven approach to ensure immediate support to the enhancement of the country’s health infrastructure, including the contribution towards PPEs and other vital health kits for health workers.
It is partnering with Care Bangladesh, local chapter of the global NGO, to implement its support initiative.
It is also committed to support the frontline workers including Doctors, Nurses, Police & other law enforcers in performing their duties by catering to their hydration needs through its beverages.
Stock markets turned higher Tuesday after a mixed session in Asia as governments inch toward letting businesses reopen and central banks step in with still more support for ailing economies. The price of oil, however, extended its losses.
From Rome, Georgia, to Rome, Italy, companies are watching as politicians detail plans to ease up on restrictions that were meant to slow the coronavirus pandemic but also have erased businesses and jobs.
With central banks and governments promising huge amounts of aid for the economy, some investors are focusing on the potential return of growth as the outbreak levels off in some areas.
In Europe, France's CAC 40 gained 1.3% to 4,563, while Germany's DAX rose 1.5% to 10,817. Britain's FTSE 100 gained 1.5% to 5,934.
U.S. shares were set to drift higher with Dow futures adding 1.3% and S&P 500 futures gaining 1.2%.
Japan's benchmark Nikkei 225 surged Monday after the central bank lifted its ceiling on purchases of government bonds and other assets that it uses to pump more cash into the economy. It edged 0.1% lower Tuesday, to close at 19,771.19.
"Yesterday's Bank of Japan 'Whatever it takes' announcement could be viewed positively by investors," said Robert Carnell, regional head of research, Asia Pacific, at ING, of the Bank of Japan's monetary easing Monday. "Basically, the monetary spigots are wide open."
Elsewhere in Asia, South Korea's Kospi gained 0.6% after fluctuating much of the day, to 1,934.09. Australia's S&P/ASX 200 lost 0.2% to 5,313.10. Hong Kong's Hang Seng rose 1.2% to 24,575.96, while the Shanghai Composite fell 0.2% to 2,810.02.
The U.S. Federal Reserve is holding its own monetary policy meeting Tuesday and Wednesday, though it is not expected to add to the huge amounts of stimulus it has already deployed, though investors will be keen for more detail on the economic outlook.
The European Central Bank will hold its own meeting Thursday, and is likewise expected to mainly fill in details of its stimulus programs, or possibly tweak them, as it keeps an eye on a historic plunge in the economy
Worries persist about new surges of coronavirus cases in places like China and South Korea, where they had declined as a result of social distancing, testing and arduous efforts by medical workers.
Japan's government is warning against travel during the Golden Week holidays, which start this week and extend into early May, the biggest holiday for the nation after the New Year's holidays.
There is no lockdown in Japan but the government has declared a state of emergency, requesting that people stay home. That lasts through Golden Week, but it may be extended.
A slew of corporate earnings announcements is lined up for this week.
Nearly a third of the companies in the S&P 500 are scheduled to report how profitable, or otherwise, they were in the first three months of 2020 and, more importantly, perhaps talk about how they see future conditions shaking out. That includes the Big Five of Amazon, Apple, Facebook, Microsoft and Google's parent, Alphabet, which together make up about a fifth of the index.
On Tuesday, Nissan Motor Co. said it expects to log a net loss of up to 95 billion yen ($880 million) for the full fiscal year that ended in March, much lower than its earlier estimate for a 65 billion yen net profit. The company also pushed back its report for full year earnings to May 28 from mid-May.
In Europe, oil producer BP reported a slide in earnings that reflected the drops in energy markets, while HSBC bank set aside more money to cover potential defaults on loans it had issued as a result of the economic slump.
In energy markets, the benchmark for U.S. oil extended its losses, dropping $1.39 to $11.39 a barrel in electronic trading on the New York Mercantile Exchange. That added to a drop of $4.16 a barrel on Monday as investors worry about oversupply at a time when storage space for crude is scarce. Brent crude, the international standard, fell 10 cents to $22.97 a barrel.
The dollar slipped to 106.61 Japanese yen from 107.20 yen. The euro gained to $1.0886 from $1.0829.
PRAN Dairy Limited has continued to collect milk from its contractual dairy farmers at a time when the farmers are facing difficulties to sell milk due to ongoing general holidays across the country to prevent the spread of coronavirus.
The organization is collecting more than 2 lac liters of milk every day from its farmers, said a press release.
Rakibur Rahman, Chief Extension Officer at PRAN Dairy, said dairy farmers cannot sell milk as hotel, sweet shop and tea stall are now closed and many customers stop purchasing milk. But PRAN dairy has continued to collect milk from its farmers despite many hurdles.
“We are collecting the same amount of milk what we collect in normal time.”
“PRAN has five hubs located at Chatmohar of Pabna, Gurudaspur of Natore, Shahjadpur and Baghabari of Sirajganj and Rangpur. There are 101 collection and chilling centers under the hubs. Farmers are supplying milk at the collection and chilling centers maintaining social distance and following health guidelines. We are purchasing milk from the farmers at Tk 38 to Tk 45 per liter depending the amount of fat in the milk,” he said.