Mike Wuerthele
In spite of the major financial hit it took after the Galaxy Note 7, Samsung Electronics on Tuesday said it managed a 50 percent boost in operating profits during the December quarter, thanks to a combination of high chip sales and other phones filling in the gap.
Operating profits rose to $7.93 billion, in fact the company's best Q4 performance in more than three years, Reuters reported. This is largely because earnings from memory chips jumped 77 percent year-over-year to about $4.25 billion, an all-time high.
In the company's mobile division, operating profits rose 12 percent during the quarter to about $2.15 billion, buoyed by sales of the Galaxy S7 and S7 Edge, as well as some other phones.
The two recalls and discontinuation of the Note 7 will ultimately cost Samsung over $5 billion. Earlier this week the company announced the conclusion of its own investigation, finding that fires were the product of two separate battery defects, one prior to the first recall and the second after.
The company is adopting stricter precautions for future products, such that the Galaxy S8 will miss a debut at February's Mobile World Congress in Barcelona — typically, where Samsung prefers to show off new Galaxy S phones. It's not clear when the device will actually ship.
Reports have suggested that Samsung rushed the Note 7 to market to win more sales ahead of the September launch of Apple's iPhone 7, which was expected to be a minor upgrade and hence weaker competition.
William Gallagher
Christine McKee
Andrew Orr
Charles Martin
Marko Zivkovic
Wesley Hilliard
11 Comments
Gotta love Barclays downgrade of AAPL today. That is sarcasm. Any time Apple gets some gumption they are hit with an analyst downgrade. It has been happening for two years. I know it is an opportunity for their clients to get in lower, but it does get old. I still say Apple surprises to the upside on iPhone 7 and Macbook sales on Jan 31. iPhone 8 interest is ramping up. It looks like AAPL may be shaking off the downgrade which is a sign of strength, as AAPL has been shaking off multiple downgrades here lately and moving up regardless. Long Apple.
This doesn't seem remotely possible. Like VW is going to post record profits. Right. I suspect South Korean laws regarding corporate reporting are VERY friendly.
I could have told you this months ago. The so-called “Note 7 disaster” was no disaster at all. It was a minor hiccup and that’s all. Nobody cared, especially the tech media, who continue to praise the Note 7 even today. And the Galaxy 8 and Note 8 will be touted as the ultimate iPhone killers. People will buy them in droves because they simply don’t care about exploding phones. The new mantra by the Samsheep out there is, “Well, no one was killed so what’s the big deal?” I kid you not. That’s what’s being said on c|net.
In my opinion this can only mean the doesn't contribute to the bottom line in a big way. They couldn't have sold that many. If they sold 20 or 30 million units it would have made for a loss instead of a profit.