Samsung Electronics has today announced its earnings forecast for the first quarter of the fiscal year 2017. And the Korean behemoth is continuing its fantastic growth spurt even though it has been buried knee deep in controversies since the previous year. Samsung is yet again gearing up to beat Wall Street expectations, courtesy of its fledgling silicon business.
In an official blog post, Samsung reported that it is expecting an operating profit of around 9.9 trillion won (approx $8.7 billion). This is 48 percent higher than the profit figures for the same quarter a year before. It is also being touted as the best operating profit figure for the quarter ended March in over three years. The same was about 9.56 trillion won in the first quarter of 2013. The company also expects to report a rather flat revenue figure – 50 trillion won (approx $44 billion), which is 0.4 percent higher than analyst estimates.
The Korean giant is projecting the aforementioned figures for Q1 2017 despite the troubles which have plagued them over the past six odd months. Most analysts suggest that Samsung’s chip and display business is continuing to perform better than expectations, they are booming, to say the least. We already have evidence of the same in the form of previous quarterly reports, where these businesses contribute about 68 percent to the overall operating profit.
The chips and display business have replaced the previous leader — smartphone — business. It is because the company didn’t have any flagship device to sell for about two quarter last fiscal year. The company has managed to recover from the continuous explosion of its previous flagship smartphone — Galaxy Note 7.
It detailed two distinct battery flaws which caused the Galaxy Note 7 devices to heat up and literally catch fire, especially when it was plugged in for charging. Thus, Samsung prioritized the user’s safety and about 2.5 million Galaxy Note 7s were recalled from across the globe. It has, however, announced that Note 7 will make a return in a refurbished form.
Also, if you’re unaware, Samsung Electronics’ de-facto chief Jay Y. Lee has been slapped with embezzlement and bribery charges. He is said to be involved in an embarrassing corruption scandal, which has shaken the country and led to the impeachment of President Park Geun-Hye (who is also the first democratically elected President to be thrown out of office). Lee has been accused of paying out close to $40 million in bribes to Park’s close friend Choi Soon-Sil in exchange of favors to build an electronics empire.
But, the numbers predicted by the Koren giant seem to suggest that both of these controversies might’ve affected its brand image but the business is running completely fine — or even better than expected. These scandals haven’t had much impact on the profits, sales or even the revenues. And Samsung is expected to break all earning records in the coming quarter as its next flagship device — Galaxy S8 and S8 Plus go on sale later this month.
