Despite Note 7 fiasco & bribery scandal, Samsung just had the most profitable quarter in 3 years

By , Jan 24, 2017

Despite seeing its brand tarnished and anywhere between $2 billion and $5 billion wiped off its operating profit in the aftermath of Note 7 fiasco, Samsung of South Korea has managed to boost its fourth quarter earnings on the back of its semiconductor division and strong sales of the Galaxy S7 and Galaxy S7 Edge flagship devices.

Operating profits rose to $7.2 billion over the last three months of 2016 on sales of about $45.8 billion. Samsung’s mobile division captured $2.1 billion in operating income, a four percent year-over-year profit increase.

Samsung Mobile expects sales of its low-cost phones in the Galaxy A and J series to grow in the coming months. All in all, this was Samsung’s most profitable quarter in three years as the company has clearly bounced back from the global Note 7 recall.

A weaker Korean won relative to the U.S. dollar has helped, too.

Samsung’s semiconductor division is expecting increased demand in 2017. That unit used to exclusively churn out Apple-designed mobile chips for years before losing the Apple contract to rival TSMC. System LSI, Samsung’s semiconductor division, will continue to diversify its customer base in order to increase earnings.

Demand for Samsung’s memory chips is rising, too, while its in-house designed Exynos processors will power the infotainment systems in Audi’s next generation automobiles. Samsung is also buying U.S. auto parts giant Harman for $8 billion.

In 2017, the components businesses expect solid demand for value-added semiconductor products and for flexible OLED and large-size LCD panels. The company will seek to improve profitability in DRAM and NAND amid continued growing demand for data center servers and mobile devices.

Samsung’s display division has managed to increase earnings to $1.1 billion. Samsung Display is the world’s top producer of OLED screens for smartphones and tablets with a 90+ percent market share. The South Korean chaebol is expected to be a lone supplier of OLED panels for iPhone 8 until other suppliers like Sharp, Japan Display and LG Display ramp up OLED panel production in 2018.

“Robust sales of high-end, high-performance memory products and expanded process migration in V-NAND, plus strong shipments of OLED and large-size UHD panels contributed to profitability,” said the firm.

Earnings from flexible OLED panels are expected to increase year-over-year due to an expansion in supply, the company said. Samsung expects to meet stronger competition in the LCD market with value-added products focusing on 4K and large-size TV panels.

During a conference call with investors and analysts, Samsung confirmed that its upcoming smartphones would include artificial intelligence features while Galaxy S8 should offer “a differentiated design,“ in the company’s own words.

Just yesterday, the South Korean giant shared results of the investigation into Note 7 fires, which found two separate flaws within the batteries. The Galaxy maker confirmed that Galaxy S8 won’t be announced at Mobile World Congress next month.

Samsung’s mobile chief D.J. Koh said yesterday that Galaxy Note will continue despite the enormous baggage that comes with the Note name. “I will bring back a better, safer and very innovative Note 8,” he told CNET.

For the sake of completeness, Samsung’s president Park Geun-hye is currently under investigation in South Korea over charges that he paid bribes to an associate in order to win governmental support for a merger of affiliates in 2015.

Source: Samsung

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  • Natalie

    Of course they’d see an increase. Where else could you buy legal bombs for suicide other than from Samsung? lol

    • Snailpo

      Aloha snack bar

  • leart

    probably they are trying to reuse Note 7 parts on another innovative feature device.. I’ll bet for this

    • Rowan09

      Apparently the S8 since it’s now delayed.

  • n0ahcruz3

    This only indicates how boring 7 and 7+ are despite the note 7 fiasco lmfao, now lets wait for apple earnings call

    • Rowan09


      • n0ahcruz3

        Why are fanboys get butt hurt easily when someone criticizes their precious company? smh

      • Leopoldo Pereira

        Tell this to all samboys, like yourself, when the Notes began to blowup LOOOOOOL!

      • n0ahcruz3

        Lol i use an iPhone 7+

      • Rowan09

        You do, you have allegiance to Samsung because everything they do you drool over it. I just don’t get why you have an iPhone, I’m starting to believe it’s because you like IDB so much you want to be a part of the community.

      • n0ahcruz3

        Lmfao prove it fanboy

      • Noohar

        I see “butthurt” is very pronounced in your vocabulary. You must be what 15? 16?

      • n0ahcruz3

        No im just a troll

      • Rowan09

        I’m not hurt though just trying to understand why you who always say something great about Samsung as if they can do no wrong, even with the a Note 7 disaster and own an iPhone 7. You want me to take a picture for you ok I’ll do it tomorrow when I get back home. I’m not sure why I would need to lie, but if it makes you feel better I’ll do it.

      • Mike

        You can’t really tell him much since you are the one always bashing on any samsung phone that comes out. Plus having a curved display wouldn’t make you phone die faster since they are giving you a bigger battery for the more pixels.

      • Rowan09

        Bashing any Samsung phone? I never speak about a device I don’t own or used a lot. I own the S7 Edge and can speak about it positives and negatives. The iPhone has both positive and negatives as well. Who said anything about a curved display makes a phone die faster?

      • n0ahcruz3

        Then do it lol remember one time when u said iphone was 15 years old? Hahaha

      • Rowan09

        I was talking about the iTunes phone, the Motorola Rokr. Man you won’t let me forget huh.

      • Rowan09

        I really don’t get you because you “use” an iPhone 7 always saying how much you hate it, call me a butt hurt fanboy when I own both the iPhone 7+ and S7 Edge. Dude are you a troll? You believe Samsung having a good quarter means the S7 Edge is more popular than the iPhone 7 or sold more? You do know that’s not the case right?

      • n0ahcruz3

        Where did I mention i “hate” my 7+? Lol if u go over my comments never did i mention i hated it lol

      • Rowan09

        You call it boring and the same phone. I have never heard you say anything good about it and I’ve even asked you why don’t you just get a Samsung device multiple times. I even said I’ll trade you my S7 Edge if you want it for your iPhone. Explain why Edge screens are better? I got the S7 Edge because it had a bigger battery. The Edge of the screen is annoying at times because I always accidentally press it when watching Kodi, etc. Edge to Edge display is good but a curved screen is not that great for anything besides looks.

      • n0ahcruz3

        Lol i did mention i liked the portrait and the new home button, and yes its boring but i still prefer iOS over any android

      • Rowan09
    • igorsky

      That doesn’t indicate that at all. It indicates that Samsung is diversified in other areas. Learn to read.

      • n0ahcruz3

        I read, why so butt hurt? lmfao profit is still a profit

      • leart

        fagdroid broke and desperate butt hurted detected lol

    • Leopoldo Pereira

      This indicates how boring your comment is, samboy.

      • n0ahcruz3

        Lame hahaha butthurt apple fanboy?

      • leart

        fagdroid with brain defect detected lol

    • Rowan09

      78 billion is reported for Apple, I guess it’s Samsung’s turn now huh?

  • Leopoldo Pereira

    Let’s celebrate exploding all Note 7’s!

  • M_Hawke

    Must say that that is impressive. Shows the advantage of being diversified.

  • The King

    Sounds like the S7 and S7 Edge were really good devices for the company.

  • SohrabR

    Samsung used their position in the flash market to compensate. Flash prices have been going up with roughly about 30-40% since note 7 debacle. Samsung is one of the few companies who can deliver the chip. They misused their position to compensate.

  • Tom

    Yes ignore the exploding iphones all you like but the Note 7 was so far ahead of anyother phone you couldn’t see them in your review mirror.