The company predicts highest profits in three years

Jan 6, 2017 08:19 GMT  ·  By

Samsung has stated recently that its profits for the fourth-quarter will most likely raise by 50% compared to last year, reaching the highest level in three years. It seems that profits will beat expectations on strong chip sales and a rebound for the smartphone division is also expected.

The report by Reuters reveals that Samsung’s mobile division has seen a more rapid recovery than many had anticipated following the recall and discontinuation of the Galaxy Note7.

A few months ago, Samsung was forced to take responsibility for one of the biggest safety failures in tech history when one of the company’s flagship models was found to have overheating problems that caused the phone to catch fire. The reasons behind the failure are still unknown, as Samsung is expected to disclose the results of its investigation later this month.

"Samsung posted solid earnings only with sales of older smartphone models like the S7 after the Note 7's discontinuation," said Kim Sung-soo, a fund manager at LS Asset Management. Indeed, the Galaxy Note 7 recall left way for other premium smartphone makers to dominate holiday season sales, but Samsung did manage to bounce back with the help of its Galaxy S7 and Galaxy S7 edge, released early last year.

Samsung will disclose detailed earnings later this month

Samsung said October-December operating profit would likely record the highest level since 2013, reaching about $7.8 billion. A recent depreciation in South Korean won may have helped Samsung’s profits, since component sales are settled in US dollars. Samsung lost $6 billion with the Galaxy Note 7 recall.

Samsung is expected to disclose detailed earnings, including the performance of its mobile division in late January, and analysts expect the latter to record its first annual gain after massive losses caused by the Note 7.

Needless to say, Samsung will be posting a hefty profit in June, after the Galaxy S8 is released to the market. The upcoming smartphone will surely attract some lost Note 7 fans, considering that Samsung might include the S Pen as an external accessory.