​Samsung posts record Q3 profits driven by chips

A record performance from its memory business and a boost from the Galaxy Note 8 have seen Samsung post record quarterly profits for Q3 2017.
Written by Cho Mu-Hyun, Contributing Writer

Samsung has reported an operating profit of 14.53 trillion won and revenues of 62.05 trillion won for Q3 2017, both its highest ever for a quarter.

Operating profit is triple that of last year's and slightly higher than this year's second quarter, its previous record.

Recovered smartphone sales and high profitability of memory chips were the main contributors, the company said.

The tech giant's memory business contributed 9.96 trillion won, two-thirds of the operating profit. Samsung credited strong NAND sales from flagship phones and expansion in the cloud for DRAM. Strong demand is expected to continue going forward next year.

Logic chips got a boost from image sensors, in high demand in China.

Samsung's mobile business saw 3.29 trillion won in operating profits thanks to solid sales of the Galaxy Note 8 -- a decline from the previous quarter but an immense boost from last year's 100 billion won due to the Galaxy Note 7 fiasco. Going forward, it will boost is artificial intelligence (AI) and software competence to differentiate from rivals, it said.

Its OLED business -- which supplies small-sized displays for smartphones for itself, Apple, and Google -- saw a boost in sales from flagship phone launches, but profits slightly declined due to the ramp-up cost for new production lines. The division added 0.97 trillion won in operating profits.

Samsung expects higher margins next year as OLED will be the main trend in mobile displays.

In consumer electronics the tech giant saw an operating profit of 0.44 trillion won. Sales increased but profit dropped from last year due to an increase in display panel costs in TVs. However, it said its QLED TV has gained 40 percent market share in TVs larger than 60 inches.

Next year's World Cup and Winter Games will boost TV sales next year, the company said.

Samsung also announced its fourth and final phase of its share repurchase program. It will repurchase and cancel 712,000 common shares and 178,000 preferred shares. Previously, it has repurchased and cancelled 2.59 million common shares and 648,000 preferred shares this year in three phases. Dividends for the third quarter will be 7,000 won per share.

The company also announced a shareholders return program for 2018 to 2020. Dividends will increase 100 percent from this year, and will be kept at the same level up to 2020.

Samsung expects a total of 29 trillion won in returns for the next three years from the program.


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