SEOUL (The philipines): Samsung Electronics said Friday it expects profits to soar by nearly 50% while in the December quarter, as strong memory chip prices push earnings recommended to their highest time in 36 months despite a smartphone recall fiasco.
The world’s largest memory chip maker estimated its operating profit during the October-December period at 9.2 trillion won (US$7.8 billion), up 49.8% from your year earlier.
The news sent Samsung shares rising 1.9%.
Brisk sales of memory chips and smartphone screens ended up being expected to increase the company’s net profit nevertheless the outcome exceeded analyst expectations of an fourth-quarter profit of some 8.4 trillion won.
“This is certainly well past market expectations”, Gred Roh, an analyst at HMC Investment Securities told AFP.
The strong result came despite a global recall on the Galaxy Note 7, after owners reported some devices overheating and bursting into flames, in a very crisis that damaged the trustworthiness of the world’s largest smartphone maker.
Strong sales of organic light-emitting diode screens for smartphones in addition to a weaker won also contributed significantly to the earnings growth, analysts said.
The result was the greatest since the third quarter of 2013 once the company reaped a ten.2 trillion won operating profit.
“The organization benefitted from strong consideration in memory chips and hectic sales of high-end smartphone screens using organic light-emitting diodes (OLED)”, Roh said.
Chip charges are anticipated to continue rising in coming months and may even surge above 30% in the first quarter alone, he was quoted saying.
The depreciation of South Korea’s won contrary to the dollar also led to the gains, as Samsung settles most of its component sales in the states currency, he added.
Kim Dong-Wan at Macquarie Securities said global memory chip markets produced a turn to the better within the third quarter during the past year, due to soaring interest in high-powered mobile devices.
Profit margins for OLED screens were hovering at in excess of 20% and Samsung doesn\’t have competitors in plastic OLEDs supplied to iPhones, he added.
Fourth-quarter sales were estimated at 53 trillion won during the quarter, down 0.6 % on year, Samsung said.
Samsung predicted its operating profit for that of 2016 would rise above 10% on-year to 29.2 trillion won.
IBK Securities analyst Lee Seung-Woo estimated the company’s overall 2017 operating profit would be a lot more than 40 trillion won.