Report: Samsung's Q4 Earnings To Be Above Expectations

Samsung Electronics' Q4 2016 earnings could beat market forecasts thanks to the company's strong chip sales, sources from South Korea revealed on Monday. Industry analysts initially expected Samsung to post approximately $6.66 billion in operating revenue for the last quarter of 2016, but that forecast may now be beaten by a significant margin. A securities firm IBK Securities recently told clients that it expects Samsung to reach at least $7.2 billion in operating income in Q4 2016, 68% more than it posted in the previous quarter. The company backed this forecast by pointing out a recent surge in demand for various memory chips, adding that Samsung Electronics is the largest chip manufacturer in the world and that it surely stands to benefit from this new trend.

Following these expectations, IBK Securities assumes Samsung will achieve over $3.3 billion in Q4 2016 operating profit from chip sales alone. Analysts also believe that the Seoul-based tech giant will post around $1.7 billion in operating income from sales generated by its mobile and IT division. Samsung's mobile division logged a disappointing Q3 operating profit of approximately $83 million following the discontinuation of the Galaxy Note 7. Looking at the broader picture, the conglomerate's market performance is expected to suffer due to the weakening of the Korean won. While this trend was mostly based on increasing uncertainties in the global economy, it was also related to the Galaxy Note 7 fiasco seeing how 15% of South Korea's GDP is dependent on Samsung to some degree.

Even if Samsung doesn't beat market forecasts with its Q4 2016 earnings report, the company is still expected to post an operating income amounting to at least $6.66 billion, which is a significant increase on $4.4 billion achieved during the previous quarter. In overall, while the Galaxy Note 7 fiasco certainly impacted the company's financials, it seems that Samsung is bouncing back sooner than expected. The South Korean conglomerate is expected to have a quieter first quarter of 2017 as its next flagship, the Galaxy S8, was reportedly pushed back to April while the aforementioned demand for memory chips isn't likely to remain high in the following months. More information should follow soon as Samsung is scheduled to release its latest earnings guidance on Friday, January 6th.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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