Samsung Electronics Profit Growth Driven by Component Sales
Jan 24, 2017
Memory chips and display panels prove helpful in putting recall in the past
On Tuesday, Samsung said its fourth-quarter net profit rose sharply to 7.09 trillion Korean won ($6.1 billion). Revenue rose slightly to 53.33 trillion won from 53.32 trillion a year earlier.
Operating profit rose 50% to 9.22 trillion won from 6.14 trillion won.
For the full year, Samsung’s operating profit rose to 29.24 trillion won from 26.41 trillion won. Revenue ticked higher to 201.87 trillion won from 200.65 trillion won.
Growth was driven in large part by strong sales of the company’s memory chips and display panel businesses, which contributed about 68% of Samsung’s overall operating profit. Despite last year’s Galaxy Note 7 recall, which forced the company to acknowledge about $5 billion in losses and lost sales, the company’s mobile unit alone squeezed out 2.5 trillion won in operating profit.
Samsung’s earnings report comes just a day after the company unveiled the findings of its Galaxy Note 7 investigation. It pulled the device from shelves in October following reports of some devices catching fire. On Monday, the company said “batteries were found to be the cause” of the combustion.
In a separate statement Tuesday, Samsung said it would repurchase and cancel 9.3 trillion won worth of shares this year, and that its board of directors had approved a year-end dividend for 2016 of 27,500 won per share, bringing its shareholder returns for last year to about 50% of earnings after capital expenditures.
Source: WSJ