Samsung Estimates Huge Q4 Earnings Despite Galaxy Note 7 Recall

Samsung's 4th-quarter estimates are pretty impressive, despite Galaxy Note 7 woes

A person holding a Galaxy Note 7 phone. — Digital Trends

Samsung’s smartphone division has had a pretty rough few months. Only a few months ago, the company was forced to go through an embarrassing recall of the Galaxy Note 7, arguably the best phone it has ever made, due to the some batteries in the device catching fire. After the recall and replacement program, batteries continued to catch fire, so it had to recall the replacement devices and put an end to the phone once and for all.

So it might be surprising to hear that the company estimates an absolutely massive consolidated operating profit of 9.2 trillion won — or around $7.2 billion U.S. — for the fourth quarter of 2016. That’s 50 percent more than the 6.14 trillion won, or $5.2 billion, it reported for the same quarter the previous year.

So what does all this mean? Well, it basically suggests that the Note 7 scandal was just a tiny bump in the road for the behemoth that is Samsung. Even the smartphone division reported perfectly respectable profits thanks to the Galaxy S7, indicating that the Galaxy S8 could be a big hit for the company once it does finally hit the market.

It turns out that the third quarter wasn’t quite as excellent as the fourth quarter. Samsung originally forecasted pretty hefty growth for the third quarter, but it had to revise those forecasts a little — while it originally expected to make 7.8 trillion won, or $6.6 billion, it revised its estimates down to 5.4 trillion won, or $4.4 billion.

Samsung’s massive fourth-quarter success likely isn’t due to its mobile division — but rather sales of its displays and memory. Sure, the company isn’t struggling financially, but if it wants to remain a top player in the smartphone business, the Galaxy S8 better be an excellent device.

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