Samsung has resumed sales of the troubled Galaxy Note7 and despite the issues, it reported higher than expected operating income. The company released a preview of its financial results, the full details will be available later.
Samsung recorded an operating income of KRW 7.8 trillion ($7 billion) for the third quarter of this year (July-September). This is 6% up from the 7.4 trillion it did the same quarter last year and up from the 7.5 trillion that analysts expected. This is despite a 5% year-to-year drop in sales (total KRW 49 trillion or $43.9 billion).
Analysts calculate that Samsung could have spent as much as $1.8 billion on the Note7 recall. An SK Securities analyst, Kin Young Woo, says profit from the mobile business has dropped to the lowest levels in the last three quarters.
These costs were balanced out by Samsung’s component business (especially memory chips and smartphone displays), which has been performing splendidly.
Furthermore, the demand for Samsung chips and displays will drive a massive growth in Samsung profits in the coming quarters (Kim estimates about half of Samsung’s income comes from the component business).