Samsung Electronics forecasts fourth quarter profit at over three-year high
By Se Young Lee
SEOUL (Reuters) - Samsung Electronics Co Ltd said on Friday its fourth-quarter operating profit likely leapt 50 percent from a year earlier to its highest in more than three years, beating expectations on strong memory chip and display sales.
The South Korean technology giant said October-December profit was likely 9.2 trillion won ($7.8 billion), the highest since the third quarter of 2013 and well above the 8.2 trillion won tipped by a Thomson Reuters StarMine SmartEstimate from a survey of 21 analysts. The estimate was also higher than any individual forecast in the survey.
The upbeat outlook comes despite the anticipated $2.1 billion profit hit the firm earlier forecast for the quarter due to the withdrawal of the fire-prone Galaxy Note 7 premium smartphone in October, one of the biggest product safety failures in tech history.
Investors anticipate a surge in sales of memory chips and organic light-emitting diode screens for smartphones will more than make up for the Note 7 setback, and translate to strong earnings growth for the October-December period and through 2017.
The world's biggest maker smartphones, TVs and memory chips will not disclose detailed earnings, including the performance of its individual businesses, until late January.
Analysts expect Samsung's chip division to earn a record of more than 4 trillion won in operating profit in October-December thanks to strong demand from smartphone makers, including major client Apple Inc , and high-end data storage products.
Many analysts also expect the mobile division's quarterly profit to rebound from the third quarter, when the firm booked the bulk of its Note 7 losses, and post its first annual gain in three years thanks to healthy sales of Galaxy S7 smartphones.
Samsung Electronics said fourth-quarter revenue likely fell 0.6 percent from a year earlier to 53 trillion won.
($1 = 1,180.5500 won)
(Reporting by Se Young Lee; Editing by Stephen Coates)