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January 6, 2017

Samsung expects huge profit despite Galaxy Note7 crisis

The company will release final earnings results later this month.

By CBR Staff Writer

Samsung Electronics expects to report a 50% increase in profits for the fourth quarter, despite the embarrassing worldwide recall of the Galaxy Note 7 smartphones.

The South Korean company said in its earnings guidance that it expects operating profits of 9.2tn won ($7.7bn) during the October to December quarter, up from a profit of 6.1tn won ($5.1bn) in the same period a year ago. Sales are expected to be 53tn won, or about $44.6bn.

Reuters reported that if the latest profit figure is confirmed, it would represent the highest quarterly profit reported by the company since the third quarter of 2013.

The company’s officials had earlier noted that write-offs associated to the Note 7 recall will amount to nearly $5bn.

Overall the company estimated full-year 2016 consolidated sales of about 201.54 trillion Korean won and consolidated operating profit of nearly 29.22 trillion Korean won.

The company will release final earnings results later this month.

Last October, Samsung stopped production of its Galaxy Note 7 smartphones after the devices were reported to have caught fire due to overheating.

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Major operators in the US have abandoned sales of the Note 7 over the issues and several global airline carriers have banned the device from flights.

In September, the company said that it had given replacements to 60% of its customers owing the smartphones in the US and Korea after a recall issued for the devices.

In the following month, Samsung expanded the recall on all original and replacement Galaxy Note7 devices sold or exchanged in the US.

The company said that it will very soon share details of its investigation into the issue.

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