Samsung predicts 50% profit surge despite Note 7 issues

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‍South Korean conglomerate Samsung Electronics has predicted a likely 50 percent jump in its fourth quarter operating profit in its initial annual report, reaching two trillion won (about 7.8 billion US dollars).

If the profit figure is met, it would mark the highest profit number in three years, despite the huge scandal with its flagship Galaxy Note 7 smartphone. However, the technology giant said its fourth-quarter revenue would fall 0.6 percent from a year earlier to 53 trillion won.

CFP Photo

Analysts said Samsung's chip division and the Organic Light-Emitting Diode (OLED) business have contributed to the record high profits, thanks to the strong demand from smartphone makers, including Apple Inc.

It is expected that the company will see a rebound in its mobile phone business on the back of the new flagship Galaxy S8 series, which will be launched in early 2017.

CFP Photo

For the past few months, the global headlines for Samsung had been its Note 7 cellphone catching on fire or its exploding batteries. The reports of Note 7 phones exploding also emerged in China, since the phones started to be sold on September 1 across the country, but Samsung had said the batteries in the phones sold in China were provided from a different supplier.

An exploded Note 7 smartphone/CFP Photo

It was a huge blow on Samsung's reputation, and the company made the decision to recall some 2.5 million of the phones in early September, China not included. Until October 11, the company announced it would recall all Note 7 phones that it had sold in the Chinese mainland. Samsung was then confronted with claims that it didn’t treat Chinese customers fairly.

The disastrous withdrawal of the fire-prone Note 7 dragged down the third-quarter operating profit to 5.2 trillion won, a 30 percent decrease, according to the Samsung data, and the net income of 4.4 trillion won was also a 16.8 percent decrease.

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