Samsung Electronics Reports Record High Operating Profit in 2017

Samsung Electronics Reports Record High Operating Profit in 2017

Prices for benchmark memory chips have leveled off after a year of strong gains, limiting the growth that had powered Samsung to record earnings in the past two quarters.

Operating profit was estimated at 15.1 trillion won (US$14.1 billion) in the October-December period previous year, up from 9.2 trillion won tallied during the same three months in 2016, the company said in a regulatory filing.

Still, rising demand for organic light-emitting diode screens helped to fuel a rise in sales to 66 trillion won in the quarter, compared with the 67.6 trillion won analysts expected.

"Considering Apple and Chinese firms' sales weren't stellar either, overall mobile demand appears to have been sluggish".

In the stock market, Samsung shares fell 3.11 percent - likely due to lingering doubts over the company's business outlook.

The last time a Samsung guidance statement disappointed the market was in the wake of the embarrassing withdrawal of its fire-prone Galaxy Note 7 handsets in October 2016.

The results put Samsung's annual operating profit and sales at historic highs.

"The first-quarter operating profit is expected to stand at around 15 trillion won", Lee said in a report before Samsung's announcement. That has combined with rise of about 7 percent in the won against the dollar in the fourth quarter to erode the value of profits earned overseas.

But the outlook for semiconductors in 2018 is mixed.

The tech giant did not elaborate on its performance and will disclose full earnings in late January, according to Reuters. Samsung shares have fallen 12 percent from their all-time high in early November as some investors bet on an end to the memory boom. Contract prices for 32 gigabyte DRAM server modules almost doubled past year while prices for 64 gigabit MLC NAND flash memory chips rose 55 percent in the same period, according to inSpectrum Tech Inc.

Others however expect DRAM supply to remain tight throughout 2018 as Google GOOGL.O , Amazon AMZN.O and Facebook FB.O expand data centers used for cloud storage and computing.

Samsung previously said it expected intense competition in the premium segment of the smartphone market in the December quarter due to competitors releasing new devices. The currency traded on Monday at its highest in more than three years.

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