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Samsung Q3 operating profit KRW 5.2 trillion

Staff Writer | October 27, 2016
Samsung Electronics announced financial results for the third quarter ended September 30, 2016.
Samsung   Revenue for the quarter was KRW 47.82 trillion
Samsung’s revenue for the quarter was KRW 47.82 trillion, a decrease of KRW 3.87 trillion YOY, while operating profit for the quarter was KRW 5.20 trillion, a decrease of KRW 2.19 trillion YOY.

For the components businesses, operating profit increased QOQ due to expanded sales of high-end products, such as SSDs and flexible OLED panels, but decreased marginally YOY due to a price correction for DRAM during the first half of 2016.

POST forecast: operating profit to be 5.3 trillion won and sales 48 trillion won.

For the IT & Mobile Communications Division, earnings declined due to the Galaxy Note7 discontinuation. However, the Consumer Electronics Division achieved solid earnings growth YOY driven by strong sales of SUHD TVs and premium home appliances.

The company estimated that the stronger Korean won against major currencies in the third quarter negatively impacted operating profit by approximately KRW 700 billion, mostly on the components business side.

Looking ahead to the fourth quarter, the company expects earnings to improve YOY driven by strong performance in the components business. The mobile business expects a recovery in its earnings to a similar level with that of the fourth quarter of 2015, led by solid sales of the Galaxy S7 and S7 edge.

For the semiconductor business in the fourth quarter, the company expects earnings to improve YOY due to increased sales of V-NAND based SSD. Earnings for the display business are projected to improve YOY due to recovery in LCD, amid declines in flexible OLED panel shipments QOQ resulting from the discontinuation of the Galaxy Note7.

Looking to 2017, the company will focus on achieving solid earnings growth through normalization of the mobile business while improving earnings for the components businesses through expansion of V-NAND and OLED panels.

Regarding the memory business, the company expects earnings in NAND to increase significantly, led by the supply expansion of the highly profitable V-NAND. It also expects to strengthen its technological leadership by expanding 64 layer V-NAND and 1Xnm DRAM.

In the System LSI business, the company will aim to sustain growth momentum by expanding leadership in 10-nanometer process technology.

For the OLED business, the company expects to achieve significant earnings improvement YOY, by expanding the supply of high-end flexible OLED panels.

Regarding the mobile business, the company will focus on expanding sales of new flagship products with differentiated design and innovative features, as well as regaining consumers’ confidence. Samsung will concentrate on strengthening its competitiveness by continuously enhancing solution capabilities such as KNOX, Samsung Pay and cloud-related and artificial intelligence-related services.

For the Consumer Electronics business, the company will look to further solidify its leadership in the premium TV market based on Quantum Dot technology and improve earnings in home appliances by expanding sales of premium products and strengthening its B2B business.