Record Profits Posted by Samsung But Hopes of Investors Go Up in Flames

Overnight, Samsung revealed that it is in line to gain record annual profits.

However, quarterly profits failed expectations as the bonuses of staff, and a strong currency took some gloss off the buoyant chip market.

The electronics giant of South Korea said that operating profit of the fourth-quarter would be 15.1 trillion won (£10.4bn), a rise of 64 percent. However, it is below consensus expectations of 15.9 trillion won. The sales amounting to 66 trillion won were also closely behind forecasts of analysts.

Samsung said that full-year profits would amount to 53.6 trillion won as compared with the 29.2 trillion won in 2016.

A record annual return closes a quick turnaround for the company which suffered a troublesome second half to 2016 following the embarrassing withdrawal of the company’s Galaxy Note 7 handsets. Samsung took the mobiles off the market because of fears that they were self-combusting.

However, investors concentrated on the fact that Samsung missed expectations, with shares falling two percent in South Korean trading.

An analyst at HI Investments & Securities, Song Myung-sup, informed Reuters: “The currency effect and bonuses appear to be the main reason for missing market forecasts but smartphone shipments are also likely to be lower than expected.

“Considering Apple and Chinese firms’ sales weren’t stellar either, overall demand appears to have been sluggish.”

Analysts said that the strength of the won, which gained a three-year high on Monday, and bonuses affected profits by around 400bn won.