Samsung To Record An Increase In Q4 Operating Profits, Despite Note 7 Fiasco

Normally, one would think the year 2016 would be a year not to forget for Samsung but it seems they might not even remember it at all. Recall that Samsung’s promising smartphone, the Galaxy Note 7 which was launched some months back was involved in a battery explosion spree. It kept exploring to the extent that the parent company had to recall it twice and eventually, withdrew over 90% of the product from the market.
Given this debacle, everyone had thought Samsung’s Q4 earnings would suffer for it, but unknowingly to us, they had a backup product that was spinning money enough to cover up for the Note 7 caused revenue losses.

Strong results in Samsung’s semiconductor division will allow Samsung to post better than expected fourth quarter operating earnings this year. IBK Securities says that Samsung will report operating profit for the quarter of $7.24 billion USD. Half of it will come from semiconductor profits helped by strong memory chip sales.

HMC Securities is also expecting Sammy to report $7.24 billion USD in Q4 operating profits, which is a 10% hike from the firm’s previous estimate. It also would represent the manufacturer’s largest operating profit results in three years.


Now let us imagine the scenario this way. What if the Samsung Note 7 fiasco never happened at all? What if the Galaxy Note 7 actually became the hit phone it was already becoming before the explosions started? I can only imagine how well Samsung’s revenue and profits would have skyrocketed in this last quarter. But then, this is how things are now.
According to the analysts, Samsung would be reporting a 67% sequential gain from its third quarter operating profit of $4.33 billion USD. Most analysts and non analyst alike expected Samsung to report an operating profit below $6.7 billion for the fourth quarter because of the Galaxy Note 7 issue, and a corruption scandal.
The corruption scandal involved President Park Geun-hye, and a friend of the president named Choi Soon-sil who was said to have illegally interfered in governmental affairs. Samsung reportedly donated a lot of money to foundations run by Choi.

Well, Samsung still made a remarkable profit against all these odds. I must comment the Samsung team for a job well done and i’m guessing they can say they had a fulfilling 2016, and can only hope the Note 7 incident never happened else they would have had a more fulfilling 2016.

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