Samsung brushes off Note 7 catastrophe as profits set to hit three-year high


The Korean group said on Friday that it expects to post a 9.2 trillion won (£6.2bn) operating profit for the fourth quarter of last year, the highest since the third quarter of 2013, the Telegraph reports.

The figures surpassed expectations, especially since Samsung had said it had expected to take a “mid-3 trillion won” hit to operating profits in the quarter due to the costs of the Note 7 scandal.

High expectations around the release of the device were sorely missed when dozens of the handsets were found to catch fire and explode, forcing Samsung to recall millions of phones and permanently end production.

Profits are likely to have been boosted by the company’s powerhouse semiconductor and display businesses, which have helped prop up the company amid the struggles of its mobile phone division.

Samsung’s earnings guidance, which comes ahead of full results later this month, do not break down performance by division but demand for memory chips and screens have boosted Samsung in recent months.

The quarterly operating profit represents a 50 per cent rise on a year ago, and the company expects to post annual operating profits of 29.2 trillion won, up 10 per cent on 2015. Shares rose 1.8 per cent in Seoul.

Samsung issued a global recall of its Note 7 phone and cancelled production of the flagship in October due to a still-unexplained problem with the phone that caused it to overheat, catch fire and explode. It had earlier been forced to recall over one million phones due to what it believed were faulty batteries, but had returned the Note 7 to the market.

The company said earlier this week that it expects to share the findings of its investigation into what went wrong in the coming weeks. It is also gearing up to unveil its new high-end phone, the Galaxy S8, in February.