Samsung reports record $9.7 billion profit, buoyed by a 'memory super cycle'

Posted July 27, 2017

South Korean tech giant Samsung Electronics posted record-breaking earnings Thursday, putting it on course to better rival Apple's quarterly profits as it seeks to move past a bribery scandal and a damaging recall debacle.

The home entertainment unit's operating profit improved 8.1 percent during the same period to 343 billion won while the revenue dropped by 3.8 percent. The results indicate that the unit is turning into another key money maker after semiconductors and smartphones. Apple is forecast to report $8.2 billion in net profits next Tuesday, according to data by FactSet.

Samsung is on track to report its highest-ever annual profit for the year.

South Korean shares also ended stronger, riding a global rally in riskier assets.

Servers are driving demand for DRAM, particularly 64GB and denser devices, while demand for NAND is expected to grow on the back of new phone launches.

Samsung Electronics said it expected the memory chip boom to continue in the current quarter.

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Phil Spencer also told fans that the Crackdown 3 will be presented with a "good demo" at the Gamescom next month. Xbox One S is the only console that offers 4K Ultra HD Blu-ray, 4K video streaming and High Dynamic Range.

Samsung will see "a meaningful revenue increase" thanks to the supply of display panels "to a major smartphone customer" in the next three months, Daiwa Capital Markets analyst SK Kim wrote in an investors note.

Another victor was the display panel unit, which saw operating profit jump twelvefold to 1.7 trillion won, topping 1 trillion won for the fourth consecutive quarter.

Samsung's display business, which makes high-end OLED display panels for smartphones and TVs, also saw solid earnings of 1.7 trillion won, while its mobile business reported 4.1 trillion won in operating profit, driven by sales of its Galaxy S8 series.

There is room for optimism if the upcoming Galaxy Note 8 performs well following the recall of its predecessor past year due to safety issues.

The double-digit expansion came amid strong demand for memory chips, of which profit accounted for more than half of the total operating profit in the second quarter. Ongoing projects such as the construction of an airport in Singapore, a thoroughfare in Australia and a semiconductor facility in Korea have helped prop up the unit's operating profit.