SEOUL, Jan. 6 (Korea Bizwire) – Samsung Electronics Co. predicted Friday that its fourth-quarter operating profit last year may have jumped about 50 percent on-year, beating market expectations as strong sales of chips and displays appeared to help offset losses from a global recall of the Galaxy Note 7 smartphones.
Operating profit is estimated at 9.2 trillion won (US$7.72 billion) in the October-December period last year, up 49.84 percent from the same quarter of 2015, Samsung said in a statement.
Compared with a quarter earlier, the fourth-quarter operating profit is estimated to have surged 77 percent, it said.
Fourth-quarter sales are estimated at 53 trillion won, down 0.6 percent on-year, Samsung said.
The result beat analysts’ expectations. A survey of 17 brokerages by Yonhap Infomax, the financial news arm of Yonhap News Agency, had expected that Samsung would report a fourth-quarter operating profit of 8.4 trillion won.
It was the first time since the third quarter of 2013 that Samsung’s quarterly operating profit surpassed 9 trillion won.
For all of last year, Samsung predicted its operating profit may rise 10.64 percent on-year to 29.2 trillion won.
Full-year sales are expected to edge up 201.5 trillion won, up 0.44 percent from 2015, Samsung said.
Buoyed by the better-than-expected earnings forecasts, shares of Samsung Electronics rose 2.14 percent to 1,816,000 won as of 9:37 a.m.
Some analysts said a strong rebound of memory chip prices and healthy sales of flat-panel displays will help Samsung make up for losses from the Note 7 recall.
Samsung is expected to announce the results of its investigation into the Note 7 this month.
Solid sales of the Galaxy S7 smartphones are also likely to increase Samsung’s profitability.
Samsung did not provide reasons for the fourth-quarter earnings guidance and will elaborate when it officially releases its earnings later this month.
Kim Dong-wan, a researcher at Macquarie Securities in Seoul, said Samsung’s profits are on track for a strong recovery as prices of memory chips have rebounded since the third quarter last year amid healthier operating margins from its sales of organic light emitting diode (OLED) display panels.