While you still digest the fact that what the title says, is what it actually is, Samsung has today announced that it expects to deliver its highest profit for the fourth quarter in three years. It has been stated that the profits are likely to increase 50 percent when compared to the same quarter a year earlier.
In the Q4 earnings forecast, Samsung estimates the operating profits to reach a massive KRW 9.2 trillion (approx $7.75 billion) coupled with sales of over KRW 53 trillion (approx $44.5 billion). While the profits may be way higher year-on-year but the sales figure is one percent less compared to the same quarter a year ago. But these figures are definitely eye-popping, to say the least.
Towards the end of this previous year, the Korean giant might have suffered at the hands of explosive Galaxy Note 7 debacle but the chip and display business have helped it stay afloat. For those (still) unaware of the fate of the Note 7, let’s recap the incident swiftly. Samsung unveils the flagship phone, sells 2.5 billion of them and then its battery start exploding all across the globe — literally kaboom! shattering into pieces.
The company announces a total recall for all defected models and replaces the phones but they still continue to blast and reek havoc, so then it finally decides that there’s no need for another recall. And this marked the day on which the Galaxy Note 7 was pronounced dead. Since it has been conducting investigations to find the cause for the blasts and it has discovered the same. The findings have currently been given to foreign agencies and it is looking to publish it by the end of this month.
Further, Reuters, citing analysts including Kim Sung-soo, a fund manager at LS Asset Management, has mentioned that Samsung’s mid-tier budget smartphones helped it weather the storm. The demand for chips in these devices launched in Chine was relatively high and it expects the same to be responsible for 4.5 trillion won ($3.8 billion) of its operating income.
As for the earnings call for the third quarter, which saw the demise of the Galaxy Note 7, the company posted an operating profit of KRW 5.2 trillion (approx $4.6 billion) on revenues of KRW 47.92 trillion ($40 billion). These figures witnessed a decline of 30 percent and 7 percent year-on-year respectively. The company has previously intimated that the operating profit could tank by $3.1 billion due to the Galaxy Note 7s which exploded repeatedly.