Apple rival Samsung forecasts high profits despite Note 7 fires & political scandals
Samsung 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.