Apple rival Samsung forecasts high profits despite Note 7 fires & political scandalsSamsung Electronics on Friday announced a forecast of its best profits in over three years for the March quarter, despite dealing with the fire-prone Galaxy Note 7, and a political scandal that resulted in the arrest of vice chairman Jay Y. Lee.
Operating profits likely hit $8.8 billion, beating an analyst consensus of just under $8.3 billion, Reuters reported. Overall revenue is estimated to have grown 0.4 percent to over $44 billion, again topping analyst predictions.
Sales are thought to have been fueled by Samsung's semiconductor business, and to a lesser extent low- to mid-range smartphones. The company is world's biggest memory chip supplier, topping the likes of Toshiba, and riding high on a memory "super-cycle."
Battery problems with the Note 7 led to two recalls and the eventual termination of the product. In January, Samsung estimated that the debacle would cost it $5 billion, without factoring in any damage to its reputation.
Lee is accused of directing money to Choi Soon-sil, a close friend of ousted South Korean President Park Geun-hye, in return for political favors —above all, support from the National Pension Services for a 2015 merger between Cheil Industries and Samsung C&T, which gave Lee more power within the Samsung Group. On Friday, the executive appeared in a Seoul courtroom. Other Korean corporations have also been accused of undue influence.
Samsung's fortunes could improve still further with the release of the Galaxy S8 later this month. The phone contains many features expected for Apple's "iPhone 8," such as a curved, 5.8-inch OLED screen, virtual buttons, 3D facial recognition, and augmented reality functions.