Samsung's profit soars in the fourth quarter

Samsung's profit soars in the fourth quarter. January. 07, 2017 07:04. by Ji-Hyun Kim, Dong-Jin Shin jhk85@donga.com,shine@donga.com.

Samsung Electronics recorded 9.2 trillion won of operating income during the fourth quarter of 2016. The recent earnings have exceeded market expectations by around 1 trillion won, and made Samsung stand back on its feet after the devastating suspension of manufacturing “Galaxy Note 7” last October.

According to Samsung on Friday, the electronics giant has estimated its fourth quarter sales and operating income at 5.3 trillion won and 9.2 trillion won, respectively. The recent operating income comes as the third highest since the third quarter of 2013 at 10.16 trillion won and the second quarter of 2013 at 9.53 trillion won.

Last year, Samsung recorded 201.54 trillion won of sales and 29.22 trillion won of operating income. Annual operating income also recovered with the “V” swing, rising higher by 2.81 trillion won, or 10.6 percent, to 26.41 trillion won in 2015. The figure is recorded as the second highest since its record-high operating income at 36.79 trillion won in 2013. Sales also began to show growth trend, after its downturn since 2013.

The strongest driver for the earnings surprise was indeed its already successful semiconductors business. While performances per division are yet to come, it is predicted that Samsung’s semiconductors subsidiary raised around the record-high 5 trillion won of operating income last quarter. The semiconductors parts business alone raked approximately 6 trillion won. Experts forecast that the semiconductors market will continue to remain rosy for the time being. When the growth momentum continues, there are even optimistic outlooks that operating income will recover to the 10 trillion won level during the first quarter.

It was also known that the IT mobile business, which accounted the entire loss due to the suspension of Galaxy Note 7 in the third quarter of last year, and recorded higher year-on-year from the previous 2.23 trillion won.