Samsung Electronics Q3 operating earnings to show gain thanks to chips and displays

Samsung Electronics said on Thursday that it expects third quarter operating earnings to have risen 5% year-over-year to $6.9 billion. That would be 4% above a Thomson Reuters StarMine SmartEstimate of analysts' expectations. Revenue is forecast to have slipped 5% in the three-month period to $43.9 trillion. The final third quarter numbers will be announced later this month.

The figures do not take into account the cost of the manufacturer's recall of the Samsung Galaxy Note 7. No sooner had the device launched to strong demand than a number of units caught on fire leading to a voluntary recall on September 2nd. An official recall in tandem with the U.S. CPSC was announced less than two weeks later.

While the cost of the recall and device exchange could be as high as $1.8 billion, some analysts say that this cost will be more than made up by sales of the company's chips and high-end smartphone displays. According to SK Securities analyst Kim Young Woo, profit generated by Sammy's mobile business in the third quarter was its lowest over the last three quarters. However, earnings from components will more than make up for the Galaxy Note 7 fiasco. "We'll see an earnings surprise in the display and memory chip businesses," said the analyst. "The numbers will show that they are the two growth engines for Samsung."


source: Chron