Samsung Defies Setbacks, Sees Q1 Profits Surge

South Korean technology giant Samsung is anticipating a dramatic surge in profits for the first three months of this year despite recent misfortunes, including the saga of the exploding Note 7 and allegations of corruption at the top level.

In a statement released this morning, the maker of smartphones and TVs put operating profit in the first quarter at about 9.9 trillion ($10 billion) Korean won, an increase of 48% on the figure in the same period last year.

Revenues, however, are not expected to increase much over the same period, rising to about KRW50 trillion ($40 billion) from KRW49.78 trillion in the first quarter of 2016.

Samsung's press statement contains few details about the drivers of earnings growth, but strong sales of memory chip products were mainly responsible for the bottom-line improvements, according to a report from the BBC website.

The guidance comes despite the negative publicity that has surrounded Samsung Electronics Co. Ltd. (Korea: SEC) in the aftermath of "Notegate."

Reports that its flagship Note 7 devices were prone to exploding forced the manufacturer to withdraw the products last year at considerable cost.

Lee Jae-yong, the vice president of the Samsung Corp. conglomerate, has also been charged with bribing a friend of disgraced former president Park Guen-hye. The Samsung boss went on trial in South Korea earlier today.

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Samsung's reputation as a gadget maker does not appear to have suffered all that much despite the Note 7 calamity, and a soon-to-be-launched Galaxy S8 update has received positive reviews from many analysts.

Incorporating a new voice-controlled digital "assistant" called Bixby (much like Apple's Siri), the device is due to go on sale later this month and would seem to augur well for Samsung's prospects in the second quarter of the year.

Among other things, the new-look S8 will be the first major smartphone release to support gigabit-speed services over more advanced 4G networks -- although such speeds are unlikely to be available to users in real-world commercial settings. (See Samsung Galaxy S8 to Kickstart 'Gigabit LTE' Race in US.)

Results in the first quarter seem likely to mirror those in the last three months of 2016, when Samsung similarly reported a sharp increase in profits and flat sales thanks to good business at its memory chip unit. (See 'Teflon' Samsung Defies Odds to Boost Profits.)

At the time, the company reported a decline at its IT and mobile communications division, which makes both handsets and network equipment and accounted for about 44% of fourth-quarter revenues.

Samsung also said in January that conditions were likely to be tough this year, guiding for a "slowdown" in the smartphone sector and more competition in the market for display panels.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

danielcawrey 4/8/2017 | 4:18:44 PM
One device The Note 7 is just one device in Samsung's large and complex product pipeline. 

Sure, I think we all expected there to be some blowback from that fiasco. But the company has a lot to offer, and therefore will be able to overcome. 

If this had been a smaller company, the story probably would be very different. 
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