Samsung eyes record Q4 operating profit over $14 billion

SEOUL — South Korean telecom giant Samsung Electronics expects to post record operating profits of more than $14 billion in the fourth quarter, it said Tuesday.

The company estimated operating profits of 15.1 trillion won ($14.1 billion) in the October to December period, an all-time high for quarterly profits and nearly double the 9.2 trillion won posted a year earlier.

But the figure was below analyst forecasts, which averaged 16.1 trillion won in a survey by Bloomberg.

The firm’s financial performance has soared on the back of demand for its memory chips and full-year operating profits were projected at 53.6 trillion won, or $50.4 billion — also a record.

Samsung has had to overcome a bribery scandal that saw the company’s de-facto head Lee Jae-Yong thrown into jail as well as a damaging recall last year of its flagship Galaxy Note 7 smartphone over exploding batteries.

Mr. Lee, who was found guilty in August of bribery, perjury and other charges relating to payments made by Samsung to ousted president Park Geun-Hye’s secret confidante Choi Soon-Sil, is appealing his five-year sentence and says he is innocent.

But his travails have not impacted demand for its products.

Fourth- quarter sales were projected to have jumped 23.8% year on year to 66 trillion won, with fullsales estimated at 239.6 trillion won.

The company is set to release its final earnings report later this month.

Analysts have raised concerns in the face of a stronger Korean won and a drop in memory chip prices.

“The won-dollar exchange rate is worrisome,” Lee Seung-Woo, an analyst at Eugene Investment and Securities, said in a report before the announcement, according to Bloomberg.

But Greg Roh, an analyst at HMC Investment, said the figures were “satisfactory” despite being lower than estimates.

“I think Samsung overspent on marketing because it was the end of the year,” Mr. Roh told AFP, and added: “The first quarter for this year looks good for Samsung.”

Samsung will reportedly roll out its new flagship smartphone, the Galaxy S9, next month, to compete with rival Apple’s iPhone X. —