Samsung Electronics' Q1 Operating Profit Estimated at $8.76 Billion
- Author: Terrell Bush Apr 11, 2017,
Apr 11, 2017, 5:17
South Korean tech giant Samsung Electronics Co Ltd forecast on Friday its best quarterly profit in more than three years in the January-March period, beating expectations on the back of robust demand for memory chips.
The vice chairman of Samsung Electronics was indicted on bribery, forgery, and embezzlement charges.
Investors and analysts expect Samsung to report its best-ever quarterly profit in April-June, with the Galaxy S8 smartphone hitting the market on April 21 in Samsung's first premium device launch since the Note 7's withdrawal in October.
The major South Korean firm's vice chairman, who is known professionally as Jay Y. Lee, listened on Friday at Seoul's Central District Court as prosecutors presented evidence revealing how he had allegedly used corporate funds to bribe the country's impeached president, Park Geun-hye, to secure a smooth leadership transition at Samsung.
The strong guidance failed to shore up investor's confidence in the firm, however, as shares in Samsung fell nearly 1 percent in early trading. Revenue rose 0.4 percent to 50 trillion won ($44.1 billion).
The success of Samsung's semiconductor business can be put down to strong demand for its DRAM and NAND flash memory chips from Chinese smartphone makers, which are now rolling out flagship models with up to 6 gigabytes of RAM. The report is a counter to the company's costly failure previous year with the fire-prone Galaxy Note 7 device.
The company did not elaborate on its performance and will disclose detailed earnings in late April. The results also underscore how the electronics conglomerate is recovering from last year's Note 7 crisis, when some smartphones burst into flames and forced Samsung to pull it from shelves.
While some companies have been struggling financially for quite a bit now, Samsung has been able to hold strong over the last couple of years.
Samsung is due to give more details of its financial results later this month. It posted an operating profit of 1.2 trillion won in the third quarter and 1.3 trillion won in the fourth quarter a year ago.
Operating profit in the chip-making unit of Samsung is estimated at a range of 5-6 trillion won in the first quarter.
The industry believes the memory chip market since the latter half of past year has entered a new super cycle, a period of an upturn as the result of replacements with high-performance memory in PCs and strong demand for mobile devices.