Samsung Electronics posts $7.8 bn Q4 profit estimate

Samsung Electronics posts $7.8 bn Q4 profit estimate

Samsung Electronics (KRX:005930) of South Korea has surprised everyone by predicting a 50 percent jump in their operating profits for the fourth quarter in spite of the Note 7 fiasco. While revenue rose 1.5% to 14.8 trillion won ($12 billion), a 35 billion won ($29 million) loss is projected for Q4. The final results will be released later this month. Samsung's financial health will be much better next year if they can somehow turn around their mobile business.

Samsung did not provide reasons for the fourth-quarter earnings guidance and will elaborate when it officially releases its earnings later this month. Samsung has said that its operating profit for this quarter was most likely $7.8 billion, the highest since the third quarter of 2013.

The Consumer Product Safety Commission and Samsung say consumers with a Note 7 should stop using the devices immediately. Even the smartphone division reported perfectly respectable profits thanks to the Galaxy S7, indicating that the Galaxy S8 could be a big hit for the company once it does finally hit the market. But the picture is quite different now. Now, mobile phone sales accounted for just 1.9% of operating profit.

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Increasing demand for OLED screens are limiting the negative impact from the Note 7 debacle. Prices of memory chips for PCs, of which half of the global supplies are provided by Samsung Electronics, have gained almost 40 percent from the levels of November and are expected to grow another 30 percent in the first quarter.

Samsun's focus on parts has led it to become the world's largest chip maker, specialising in dynamic random access memory, or DRAM, and NAND flash-memory chips. But that didn't hurt Samsung's bottom line as hard as one would expect.

If you're relying on a Samsung Galaxy Note 7 smartphone to conduct your business, time is quickly running out to continue using the device. That would put its full year sales at 201.54 trillion won (~$158.3 billion), resulting in a profit of 29.22 trillion won (~$24.4 billion). Shares had slipped on Wednesday and Thursday.