Samsung Numbers In Despite Recent Issues
You do not know where it (the equity stock price) is gonna land. Despite the tremendous news - including eyewitness accounts of burning phones, and major activist funds calling for executive changes and special dividend payouts - Samsung posted better than expected numbers.
Good for Samsung. Good for Korea. - Chad
By Jungah Lee (Bloomberg) -- Samsung Electronics Co. posted better-than-expected earnings as demand for its high-margin memory chips and displays limited the impact of a global recall of its marquee Galaxy Note 7 smartphone. Operating income rose 5.5 percent to 7.8 trillion won ($7 billion) in the three months ended September, the world’s largest maker of phones and memory chips said in preliminary results released Friday. That compares with the 7.58 trillion- won average of analysts’ estimates compiled by Bloomberg. While the recall has dominated headlines since it was announced last month, Samsung worked to contain the fallout from exploding smartphones and insulate its component businesses. That helped maintain growth as new devices from rivals stoke demand for memory chips and displays. A fresh issue emerged this week when billionaire activist Paul Elliott Singer launched a campaign to get the family-controlled company to restructure. “The recall-related costs have surely taken its toll on its mobile business in the quarter but its other businesses, particularly semiconductors, have fared extraordinarily well, ” Lee Seung-woo, an analyst at IBK Securities Co. in Seoul, said before the earnings release. "Even Apple has placed a huge order for chips from Samsung, I heard, and it can’t even keep up with explosive demand from China ahead of the typically strong fourth quarter." Sales were 49 trillion won in the quarter, the Suwon-based company said, compared with the 51 trillion won analysts expected. Samsung won’t provide net income or break out divisional performance until it releases audited results later this month. The company didn’t specify the financial impact of the recall. Analysts have estimated the cost at $1 billion to $2 billion. Shares of Samsung closed at 1.69 million won won Thursday, up 4.5 percent, reaching a record after Singer’s proposal to split the company and return cash to investors.