The financial impact of the Note7 recall seems to be largely behind Samsung Electronics, which on Friday forecast that its profit has grown year-on-year by close to 50 percent in the fourth quarter.
A major proportion of the profit of the largest smartphone company is expected to come from components such as memory chips and display panels, rather than from smartphones, according to analysts, a shift that was noticed in the third quarter as well.
“They were fortunate that their memory and displays businesses could offset the doom and gloom resulting from the Note 7 debacle last quarter,” said Bryan Ma, vice president for devices research at IDC.
Samsung said in its earnings guidance released Friday that its profit in the fourth quarter is expected to be 9.2 trillion Korean won (US$7.6 billion), up from 6.14 trillion won in the same quarter last year. Revenue for the quarter is expected to be around 53 trillion won, which is about the same as in the fourth quarter of the previous year.
The South Korean company suffered a major hit to its reputation and finances following its announcement of a recall and later the stopping of production in October of the Galaxy Note7 smartphones after its lithium-ion batteries were found to overheat and even explode. Samsung has not provided yet a detailed explanation of what really went wrong with the phones. Continue reading