Samsung Q4 Profit Beats Estimates Despite Galaxy Note 7 Fiasco
Samsung Electronics posted stronger-than-expected earnings for the fourth quarter ended December last year despite its debacle with the Galaxy Note7 thanks to surge in memory chip prices.
The Korean company announced on Friday that its preliminary operating profit for the October to December period last year soared 76.92 percent on quarter and 49.84 percent on year to 9.2 trillion won ($7.77 billion). It was the highest figure since the third quarter 2013 when it posted 10.16 trillion won in operating profit.
The biggest contributor to this performance was the recovering demand and prices of memory chips. The company was estimated to have earned around 4.5 trillion won to 5 trillion won from semiconductor business in the fourth quarter last year, about 60 percent higher from the same period of the previous year. Prices of memory chips for PCs, of which half of the global supplies are provided by Samsung, have gained nearly 40 percent from the levels of November and are expected to grow another 30 percent in the first quarter.
Despite major setback from the failure of its fire-prone Galaxy Note 7, increasing sales of its other flagships such as Galaxy S7 and Galaxy S7 Edge sustained its IT & Mobile (IM) division which was estimated to have recorded about 2 trillion won in profit.