Samsung's profit jumps 46 percent thanks to semiconductor

Geronimo Vena
Aprile 29, 2017

With the global appetite for high-capacity chips forecast to grow this year, accompanied by a steady hike in prices, the company expects its strong profits to continue into the second quarter.

Samsung rejected a call from USA activist hedge fund Elliott to split itself in two but accepted part of the fund's proposals on Thursday, revealing plans to cancel its existing treasury shares worth over $35 billion by 2018. It was the highest quarterly profit since the third quarter of 2013.

Shares of Samsung Electronics Co Ltd (SMSN.L, SSNNF.OB, SSNLF.OB) were gaining around 4 percent in the trading in South Korea after the company reported significant growth in its first-quarter profit with higher sales mainly in memory and display businesses. Its semiconductor department generated 6.3 trillion won ($5.6 billion) in operating income during the first three months of this year, more than double a year earlier.

Net profit came to 835.6 billion won (US$739.4 million) in the first quarter, compared to 198 billion won posted a year earlier, the company said in a regulatory filing.

LG's television business booked a 382 billion won profit, as higher panel costs were offset by growing demand for larger-sized televisions that offer bigger margins.

Samsung, the world's largest maker of mobile phones as well as memory chips, provides its chips to other companies including archrival Apple.

That announcement is a setback for USA activist hedge fund Elliott Management, which had argued that changing into a holding company would boost Samsung's share price. The Korean tech giant's operating profit rose to eight.seven billion US dollars, up more than seven percent from the previous quarter and nearly 50 percent from the same period a year ago.

Separately, Samsung said it Board of Directors approved plans to cancel the existing treasury shares held by the Company. "Samsung concluded the risks and the challenging environment surrounding a change in the corporate structure would not be beneficial for enhancing shareholder value and sustaining long-term business growth", it said in a statement.

The company invested a whopping 9.8 trillion won to build and upgrade factories - including 5 trillion won for chipmaking plants - during the period, and vowed to invest "far more than last year" throughout 2017 to maintain growth momentum.

A smaller, 3200mAh battery will be included over the previous 3500mah cell found in the original Note 7.

Altre relazioni OverNewsmagazine

Discuti questo articolo

SEGUI I NOSTRI GIORNALE