Samsung Posts Record Profits on Memory Chips, Recovering Smartphone Sales

Samsung Electronics posts record Q3 profits of $10 bn

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It made 14.53 trillion won (about $13 billion) in operating profit off 62.05 trillion won ($55.4 billion) in revenue between July and September, beating the record of 14.1 trillion won set last quarter.

"Samsung's display unit is now facing a 'new world.' When its flexible OLED sales take off, its quarterly sales will reach 10 trillion won and the operating profit will be over 2 trillion won from the fourth quarter", said Kim Un-ho, an analyst at IBK Investment & Securities.

Samsung Electronics Co. delivered a record quarterly profit for the second time this year, as it continues to cash in on strong demand for its electronics components.

Samsung's semiconductor unit, which has been riding high on surging global demand for memory chips for servers and smartphones, saw its operating profit soar almost 200 percent to 9.96 trillion won.

The tech giant added that the IT and Mobile Communications division, which covers smartphones, posted an operating profit of 3.29 trillion won, improving from 100 billion won posted a year earlier, when the handset business was hurt by the suspended production of the Galaxy Note 7.

Even so, and despite the excellent reception of its new Galaxy Note 8, the figure is 19 per cent lower than that of the previous quarter due to the unfavourable demand for its mid- and low-end models in the last three months.

Samsung still plans to almost double its capital investments of 46.2 trillion won this year with 29.5 trillion won set aside for chips and 14.1 trillion won for display.

It marks a significant turnaround for the firm which was hit badly by the global recall of its flagship Note 7 smartphone in 2016, following the fiasco with its overheating and exploding batteries. The profit margin for the business unit was 50%.

Also, Samsung Electronics announced plans to double dividend payments from 2018 to 2020, in line with steps to give more to shareholders in the wake of its record-breaking earning reports. Samsung said the performance falls behind the 790 billion won posted a year earlier due to changes in TV panel prices, although the increased shipments of premium products led to an on-quarter rise.

The company said the investment is focused on expanding the production capacities of its Pyeongtaek-based facilities to meet the rising demand for V-NAND products and improving DRAM production processes.

The won was at 1,120.4 to the dollar at the conclusion of onshore trade, up 0.4 percent from Monday's close of 1,124.6.

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