Samsung profits up despite Galaxy Note 7 disaster | Business| Economy and finance news from a German perspective | DW | 06.01.2017
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Samsung profits up despite Galaxy Note 7 disaster

Samsung Electronics has estimated its operating profit surged by almost 50 percent in the final quarter of 2016. Analysts called it an astonishing achievement, given the company's trouble with its Galaxy Note 7.

Samsung Electronics announced in a preview Friday its operating profit in the October-to-December quarter rose by 49.8 percent.

The world's largest memory chip and smartphone maker said operating earnings came in at 9.2 trillion won ($7.8 billion, 7.4 billion euros) in the final quarter of 2016, with the news seeing Samsung shares rise by roughly 2 percent.

The better-than-expected result came despite a global recall and production stop of the Galaxy Note 7, after owners reported some devices had overheated and burst into flames, damaging the reputation of the South Korean smartphone maker.

If confirmed, the result for the September-to-December period would be the best since the third quarter of 2013.

Chips in high demand

Operating profit increased mainly due to the company's flourishing mainstay semiconductor business, with the result surpassing even the most optimistic forecasts. "The surge in earnings came "thanks to the improvement in the semiconductor segment and displays on top of favorable foreign exchange rates," SK Securities analyst Kim Young Woo said in a statement.

The depreciation of South Korea's won against the greenback contributed to the gains in no small way, as Samsung settled most of its component sales in the US currency.

For the whole of 2016, the South Korean tech giant saw a 10-percent rise in annual income, its best result in three years.

The company did not provide net profit or breakdown figures in its earnings preview, saying these would be published later this month.

hg/jd (AFP, AP)


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