After surviving the most expensive product recall in tech industry history caused by its fiery Note7 devices, Samsung is still in rude financial health and has just posted its highest profit in three years.
As forecast, Samsung reported that profits in the fourth quarter were up 50pc year on year.
This is despite the humiliating Galaxy Note7 debacle that caused the company to recall more than 2m devices over safety fears, wiping $5.3bn off its operating profit. Yesterday, the company outlined the causes of the battery issues that caused the devices to catch fire.
Despite this, Samsung is bouncing back and has just delivered strong financial results.
However, the company has confirmed it will not be launching its next flagship device, the Galaxy S8, at the Mobile World Congress in Barcelona in late February.
Samsung cashes in on its chips
For its fourth quarter, Samsung reported an operating profit of $7.9bn on revenues of $44.6bn.
The strong performance was led by Samsung’s component business, which makes the memory chips and OLED and LCD display panels that feature in most smartphone devices. Revenues in the component’s business were up 77pc to $4.2bn.
Despite the Note7 recall, Samsung said its mobile business is still growing, thanks to the popularity of the company’s Galaxy S7 and S7 edge products.
“The mobile business registered gains year-on-year due to solid sales of flagship products such as Galaxy S7/S7 edge and improved profitability of mid-to-low end models,” Samsung said.
“The consumer electronics division posted an earnings decline, despite increased sales of premium TVs including SUHD and curved TVs. The digital appliances business also saw positive demand in the fourth quarter, but new investments in B2B resulted in a slip in earnings.
“For 2016, Samsung achieved solid results despite the Note7 discontinuation in the second half, as a result of continuous efforts during the past two to three years to strengthen its component business competitiveness by focusing on value-added products and widening the technology gap in the DRAM business as well as strategic investments in V-NAND and OLED.
“The company also made several key acquisitions and divestures, which will enable the future growth,” Samsung said.
Samsung brand. Image: StockStudio/Shutterstock