Beating expectations and pointing to strong sales of its new Galaxy S7 smartphones, tech giant Samsung Electronics said on Thursday its first-quarter operating profit likely rose 10.4 percent from a year earlier.

After a healthy start for new premium products and improved mid-to-low tier devices, the outlook will raise hopes the South Korean firm’s struggling mobile business is on track to post its first annual profit gain in three years.

Its January-March operating profit was likely 6.6 trillion won ($5.72 billion), well above the 5.6 trillion won profit tipped by a Thomson Reuters StarMine SmartEstimate derived from a survey of 23 analysts, the world’s top smartphone maker said in a regulatory filing. This was up 10.37 percent from the same period last year. The Q1 estimate marks a 7.49 percent rise from the previous quarter.

According to the company’s earnings guidance, the first-quarter sales were up 3.99 percent and came to 49 trillion won from 47.12 trillion won a year earlier. The regulatory filing did not reveal net profits.

Compared to any individual forecast in the survey, the operating profit guidance was also higher. Outperforming a 0.4 percent gain for the broader market, Samsung’s shares were last up 0.7 percent after it opened 1.2 percent higher following the guidance.

According to data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency, the estimated earnings hovered far above the market consensus of 5.6 trillion won by 22 South Korean brokerage houses. The securities firms had forecast sales to reach 49.1 trillion won in the first quarter.

The company provided no comment in the filing on the performance of its business divisions and will not disclose full earnings details until late April.

Amid reports of better-than-expected sales of the flagship Galaxy S7 models, which boast an improved camera, waterproofing and microSD storage support more than a dozen analysts have upgraded forecasts for Samsung earnings since late March.

Investors and analysts said that the bottom line would be further boosted by the fact that won’s average exchange rate also fell 8.4 percent against the dollar during the first quarter.

Samsung’s mobile business is expected by several brokerages to have been the top earner for the first time in seven quarters as a result.

Samsung also expects its first-quarter revenue to have risen 4 percent from a year earlier to 49 trillion won.

There was only a limited impact on the company’s first-quarter performance in 2015 when the Galaxy S6 had gone on sales in April.

The company also brought back the micro SD card slot that had disappeared in the Galaxy S6 series and the Galaxy S7 and Galaxy S7 Edge smartphones, first showcased at a trade fair in Spain in February and had these additional features

“Sales of the Galaxy S7 series are estimated to have hovered above 10 million units in the first quarter, above the expectation of 7 million,” said Shin Hyun-joon, an analyst at LIG Investment & Securities Co.

(Adapted from cnbc.com)

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