Samsung Electronics forecasts fourth-quarter profit at over three-year high
Samsung Electronics Co Ltd (005930.KS) said on Friday its
fourth-quarter profit likely leapt 50 percent from a year earlier to its
highest level in more than three years, beating expectations on strong chip
sales and a smartphone rebound.The upbeat outlook comes despite a slight fall in
revenue and the anticipated $2.1 billion profit hit from the withdrawal of the
fire-prone Galaxy Note 7 premium smartphone in October.The guidance points to a more rapid recovery for the mobile
business than many analysts had anticipated after one of the biggest product
safety failures in tech history, and reflects steady price increases for memory
chips."Samsung posted solid earnings only with sales of older
smartphone models like the S7 after the Note 7's discontinuation," said
Kim Sung-soo, a fund manager at LS Asset Management."This makes me have hopes for the (Galaxy) S8. Should
they fare well, I expect Samsung to report record earnings this year." The South Korean technology giant said October-December
operating profit was likely 9.2 trillion won ($7.8 billion), the highest since
the third quarter of 2013 and well above the 8.2 trillion won tipped by a
Thomson Reuters StarMine SmartEstimate from a survey of 21 analysts. The
estimate was also higher than any individual forecast in the survey.The South Korean won's KRW= recent depreciation may have helped
boost profits, some analysts said, as component sales are typically settled in
U.S. dollars. The local currency fell 8.8 percent against the dollar in the
fourth quarter.Investors pushed Samsung shares up 43 percent last year, betting
the surge in demand for memory chips and organic light-emitting diode screens
for smartphones will more than make up for the Note 7 setback and translate to
strong earnings growth.Samsung shares were up 2.1 percent as of 0038 GMT,
outperforming a 0.3 percent rise for the broader market .KS11. The stock
briefly traded at a record high of 1.831 million won on Tuesday.The world's biggest maker smartphones, TVs and memory chips
will not disclose detailed earnings, including the performance of its
individual businesses, until late January. Analysts expect Samsung's chip division to earn a record of more
than 4 trillion won in operating profit in October-December thanks to strong
demand from smartphone makers, including major client Apple Inc (AAPL.O), and high-end data storage
products.The mobile division's quarterly profit is also expected to
rebound from the third quarter, when the firm booked the bulk of its Note 7
losses, and post its first annual gain in three years thanks to healthy sales
of Galaxy S7 smartphones.Samsung Electronics said fourth-quarter revenue likely fell 0.6
percent from a year earlier to 53 trillion won.(Reporting by Se Young Lee; additional reporting by Hyunjoo
Jin, Nataly Pak and Cynthia Kim; Editing by Stephen Coates)
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