Economy

Samsung Electronics Logged a Record of $10.0 Billion for the Q3

Samsung Electronics Logged a Record of $10.0 Billion for the Q3”

Samsung Electronics results for the third quarter 2017 shows a record operating profit of $12.91bn up 179% on the same quarter past year.

The Semiconductor Business registered significant earnings growth and The Mobile Business saw strong shipments thanks to the launch of Galaxy Note 8 and solid sales of the new Galaxy J series, but its earnings declined quarter on quarter due to the higher sales proportion of mass-market smartphones.

For now, Samsung is reaping the fruits of its massive investment in the past decade during the days of Lee's father when the cyclical memory chip industry was vulnerable to the global demand for consumer electronics products.

Samsung Electronics is the key subsidiary of the sprawling Samsung Group, whose heir Lee Jae-Yong was found guilty in August of bribery, perjury and other charges stemming from payments to the secret confidante of ousted president Park Geun-Hye.

The figures were 30 times higher than some 100 billion won (US$89.33 million) of operating profit in the third quarter previous year when the company was forced to recall the Galaxy Note 7 after a battery flaw caused dozens of the phones to explode or burst into flames.

Sales rose 30 percent to 62 trillion won ($55.1 billion) while operating profit almost tripled from the previous year to 14.5 trillion won ($12.9 billion), in line with its preview.

Lee, who was jailed for five years, says he is innocent and is appealing. It is the first time in the history of the company that it has separated the roles of board Chairman and CEO.

It also said 2017 capital expenditure would be its biggest ever, climbing 81 percent to 46.2 trillion won (US$41 billion) as it builds new chip factories and clean-rooms to stay ahead of demand for servers and devices with ever greater memory.

With enormous profit growth, Samsung is also earmarking 9.6 trillion won ($8.6 billion) each year from 2018 to 2020 for shareholder returns, almost double its dividends in 2017.

As global tech giants such as Amazon, Google, Microsoft, Facebook and Apple expand their data centers and invest in connected cars, artificial intelligence and cloud computing, Samsung's semiconductor division appears invincible.

Samsung said it would double dividends next year to 9.6 trillion won and keep them at that level until 2020, as it responds to investor pressure to share its vast cash reserves and catch up with some of its more generous peers.

Samsung Electronics operates the world's largest semi-conductor plant and is upgrading many of its production line.

But senior vice-president Chun Se-Won told a conference call: "We are looking at a longer-term horizon. with a goal of boosting our business capabilities for the next two or three years and beyond".

Samsung shares closed up 1.9 percent, while the Kospi benchmark share price index rose 0.9 percent.

Amidst the positive profits, the firm also announced a major reshuffle of its top executives.



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