Samsung Electronics posts USD7bil. in operating profit in Q3

Samsung Electronics posts USD7bil. in operating profit in Q3. October. 08, 2016 07:59. by 서동일기자, 이건혁기자 dong@donga.com,gun@donga.com. Samsung Electronics has raised solid performance in the third quarter despite a massive recall of its flagship Galaxy Note7. Samsung made a regulatory disclosure on Friday suggesting that the company recorded 7.8 trillion won (6.99 billion U.S. dollars) in operating profit on 49 trillion won (43.9 billion dollars) in sales based on a preliminary tally of its earnings in the quarter.

The figure in operating profit exceeds expectations (7.5 trillion or 7.62 billion dollars) projected by securities companies by more than 300 billion won (269 million dollars). As a result, Samsung Electronics shares closed at 1.76 million won (1,570 dollars), up 0.89 percent on Friday from the previous day’s close, to hit all-time high for two consecutive days.

Insiders in the business community forecast that the electronics giant could top 30 trillion won (26.9 billion dollars) in annual operating profit this year for the first time since 2013, which totally depends on the success of the Galaxy Note7 revival. “Samsung’s fourth-quarter earnings will be determined by how fast the company will regain trust in the global market,” a source in the business community said.

Analysts have mixed outlooks on Samsung Electronics shares. The Galaxy Note7’s sales rebound and expectation of improving Samsung’s governance structure can help shore up its stocks. However, critics say that the factors may affect its stocks in the short term, but cannot fundamentally enhance Samsung’s profitability structure.