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January 24, 2017

Samsung sees profit jump despite Galaxy Note failure

Samsung Electronics is expecting a profit growth in 2017 in spire of the failure of it's flagship mobile device and political uncertainty.

By Joe Clark

On Tuesday, the South Korean tech company announced that it is expecting a 2017 profit boost in the fourth quarter due to earnings from its chips being much higher than initially expected, even in the wake of political events that have left the domestic and global market in an increased state of uncertainty.

The news comes just one day after an extensive report into the malfunctioning Galaxy Note 7 smartphone was released and four days after the inauguration of US President Donald Trump.

“The uncertain business environment such as the changing political landscape in Korea and overseas poses a challenge to the execution of mid- to long-term business strategies, such as M&A and investment decisions and developing new growth engines,” Samsung Electronics said in a statement.

Domestically, the company is embroiled in a legal battle within Korean politics, as they currently stand accused of attempting to influence a confidante of Korean President Park Geun-hye by illegally providing gifts. Five Samsung investigators have already spoken to prosecutors in the ongoing investigation.

Despite these events, profits for the company climbed to a three year high in the fourth quarter which reported earnings of 9.22 trillion won ($7.93 billion), a 50% increase over the previous year. Samsung has stated that the continued success of its chips is largely to thank for this boost after sales climbed by 77%  leading them to account for 4.95 trillion won.

The current exchange rate also shows that the won falling in value against a strong dollar has in turn proved to be a net positive for the South Korean exporter, as sales made in the US are worth more upon their return to Korea. Though this also means any dollar based debt has increased in price.

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