Samsung Galaxy Note 7, which will forever be known as the exploding smartphone, might have brought endless embarrassment to the Korean giant. However, its impact on the company's overall bottom line remained nominal as Samsung Electronics Co Ltd posted a stellar fourth quarter performance last year, beating expectations by posting profits touted to be its highest in three years.
According to initial forecasts, Korean-based conglomerate Samsung Electronics Co Ltd will see a sharp rise in its fourth quarter profits for 2016 which is expected to likely leap by 50 percent compared to year ago levels, Reuters reported. This is indeed a pleasant surprise considering that just months ago, the company had to recall its smarphone model Samsung Galaxy Note 7 due to product safety concerns.
2016 was a banner year for the Korean electronics manufacturer. While its earnings were slightly offset by the decrease in its mobile devices sales due to the exploding phone incident, overall performance remained strong with the company expected to post an astounding $7.8 billion in profits for the October to December 2016 period. This is a spectacular jump from year ago levels and is the highest for the fourth quarter period since 2013.
The initial estimates came from Thomson Reuters StarMine SmartEstimate with data gleaned from 21 analysts closely following the stock. However, Samsung is yet to officially announce its figures, expected to be out by the end of January.
At the height of the exploding Samsung Galaxy Note 7 controversy, there were concerns that the incident might have killed Samsung's mobile business for good. Indeed, the prospect for its mobile line was bleak back then with its mobile profits last October reported to have dropped an alarming 96 percent year-over-year, Business Insider reported.
However, the latest earnings estimates proved that the impact of the exploding smartphones on the company's overall bottom line might have been overplayed. The manufacturer quickly rebounded with the strong performance of its chips business.
In addition, its mobile business quickly recovered with the recall of the fire-prone Samsung Galaxy Note 7 on the back of sales from older models such as the S7. With Samsung's reputation on the mend, analysts are likewise hopeful that that upcoming Galaxy S8 will fare better in the markets.