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Samsung profit surges despite Note 7 battery fiasco

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AFP

Despite the fiasco with its flagship Galaxy Note 7 phone, Samsung Electronics is forecasting a 50% surge in profits for the fourth quarter.

The earnings estimate is higher than analysts’ predicted and would mark its highest quarterly profit since 2013.

In October, the world’s largest smartphone maker had to scrap the Note 7 after batteries caught fire and even replacement devices went up in smoke.

The strong results are due to Samsung’s semiconductor and display businesses.

The South Korean tech giant said it expected to post 9.2tn won ($7.8bn, £6.2bn) in operating profit for the months from September to December.

Demand for memory chip and displays is expected to remain high throughout 2017, giving investors a bright outlook for the next year.

In an earlier profit forecast for the fourth quarter, Samsung had said it expected the Note 7 recall would mean a $2.1bn hit to their profits.

The company first issued a recall for the Galaxy Note 7 in September following complaints about exploding batteries.

Image copyright
Reuters

Image caption

A Samsung Note 7 handset caught fire during a lab test in Singapore

After replacement devices deemed safe were also found to overheat and catch fire, the company scrapped the phone entirely.

Samsung said that it will “very soon” share details of its inquiry into the cause of the Note 7 problems.

The company will disclose a detailed earnings release for the quarter in late January which will give more insights into the performance of its individual businesses.

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