It’s not been a long time ago since Samsung has had to recall its Galaxy Note 7 flagship that went up in flames. However, the South Korean company has daringly announced that it predicts a huge increase in year-to-year profit.
In Samsung’s Q4 earnings guidance, that was just published, Samsung mentioned that it expects to see a consolidated operating profit worth an astounding 9.2 trillion won (~US$7.2 billion) for that period. This is almost twice the 6.14 trillion won (about $5.2 billion) in profit it received in the same quarter the year before.
Assuming that Samsung’s claims are true, it would appear that the dent made by Samsung’s recollection of its Note 7 device was a mere short-lived blip in the company’s finances instead of a huge devastating hit to consumer confidence. Of course the Note 7 would have made an effect, but for now, it seems as if the Note 7’s explosion has been contained within the 3rd quarter of 2016.
The impact was rather significant on Samsung’s Q3 profits in 2016. It had originally expected year-on-year profit growth, estimating itself to earn 7.8 trillion won (~US$6.6 billion). However, in reality, it’s profits were slashed by a third to a mere 5.2 trillion won (~US$4.4 billion).
It seems that the company’s Q4 profits however, is beating market expectations. Its mobile division still did well despite the Note 7 incident, probably buffered by its older models’ successes, think the Galaxy S7 for instance. This might suggest the S8 would still do rather well, considering consumer confidence is still fairly high.
Nevertheless, it seems that analysts have noted that unlike its success in 2013’s profit high, its success this time would be driven more by the sale of screens and memory disks alongside the fact that the Korean won has depreciated against the US dollar.
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