SEOUL, Oct. 7 (Korea Bizwire) – Samsung Electronics Co. predicted Friday that its third-quarter operating profit may rise 5.55 percent on year, despite a global recall of the Galaxy Note 7 smartphones.
Operating profit is estimated at 7.8 trillion won (US$6.98 billion) in the July-September period, compared with 7.39 trillion won for the same quarter last year, Samsung said in a regulatory filing.
Compared with a quarter earlier, third-quarter operating profit is estimated to fall 4.18 percent, Samsung said.
Third-quarter sales are estimated to fall 5.19 percent on year to 49 trillion won, Samsung said.
Backed by strong sales of NAND flash memory chips and displays, the better-than-expected projection of Samsung’s operating profit topped analysts’ estimate.
A recent survey by financial information provider FnGuide showed that Samsung is expected to post an operating profit of 7.67 trillion won for the third-quarter of this year.
Samsung started selling the Note 7 in South Korea on Aug. 19 but halted sales and conducted a global recall of 2.5 million units earlier last month following reports of some of the devices catching fire while being charged.
Analysts expected the recall to cost about 1 trillion won.
Samsung did not offer a net profit estimate for the third quarter. Its finalized earnings will be announced later this month.
Analysts said the damaging recall of the Note 7 appeared to have been partly offset by a rebound in memory chips for personal computers and OLED display panels for smartphones.
“In case of DRAM chips, demand is strong for data centers and personal computers for online games. Such demand is expected to help increase Samsung’s earnings,” said Lee Seung-woo, an analyst at IBK Investment & Securities.
Shares of Samsung Electronics jumped on Thursday after U.S. hedge fund proposed the tech giant be split into holding and operating companies and list the operating company on a U.S. stock exchange.
After the announcement of the earnings guidance, shares of Samsung Electronics gained 1.48 percent to a new record high of 1,716,000 won in early Friday trade.