Samsung's insane day: Bumper profits, new phone and its chief on trial
- Author: Carolyn Briggs Apr 09, 2017,
Apr 09, 2017, 17:38
Lee Jae-Yong (R), the vice-chairman of Samsung Electronics, is escorted by prison guards as he arrives at the Seoul Central District Court for his trial in Seoul on April 7, 2017.
On Friday, the world's largest memory chip and smartphone maker said it expected its operating profit in the January-March period at 9.9 trillion won ($8.8 billion), up 48.2 percent from a year earlier, thanks to strong sales of memory chips and display panels.
The result was higher than the market consensus of 9.3 trillion won, according to financial data provider FactSet. Samsung estimates revenue will remain flat at around 50 trillion won for the first three months of 2017.
Jay Y. Lee, the 48-year-old boss of Samsung Group, is on trial on charges including bribery and embezzlement in a scandal that led to the ouster of President Park Geun-hye.
The world's largest smartphone maker has survived a global slowdown in handset sales - and its costly recall past year of Galaxy Note 7 devices - by profiting from its strong positions in memory chips and flexible displays.
A boom in memory chips spurred by demand from smartphones and servers has helped Samsung tide over the costly failure past year of its Galaxy Note 7 smartphone and management turmoil. Some researchers believe the smartphone will set a new first-year sales record.
Song said Samsung was unaware of Park's friend, Choi Soon-sil, until after the scandal over their relationship and allegations of influence-peddling surfaced late past year.
The quarterly earnings preview show that how Samsung's business is booming while its stock trade near historic highs, despite unprecedented crises in recent months.
Lee - the first leader in Samsung's history to be detained in a criminal probe - was arrested in February for paying 43 billion won (US$ 37.37 million) in bribes to organizations linked to the president's childhood friend Choi Soon-sil to secure the 2015 merger of two Samsung affiliates and solidify his control of the business.
The forecast will come as welcome news to the South Korean giant after a torrid period in which it had to ditch its flagship Galaxy Note 7 after several battery fires. The prosecution is trying to determine whether the donations were given as bribes in exchange for government support for the company's bid to enter the lucrative duty-free business.
It would mark the second-highest quarterly operating profit ever posted by Samsung.