SEOUL, Korea, Republic Of — Samsung Electronics mentioned its October-December working revenue jumped 64 per cent to a file excessive, capping off 2017 with the largest annual working revenue and gross sales in its historical past due to the blockbuster semiconductor enterprise.
In its earnings preview Tuesday, the South Korean firm put its working revenue at 15.1 trillion received ($ 14.1 billion) for the ultimate three months of final yr, in contrast with 9.2 trillion received a yr earlier.
The outcome, nonetheless, missed expectations. Analysts polled by monetary knowledge agency FactSet anticipated 16.2 trillion received in working revenue. Analysts lowered their views on Samsung final month, citing the one-time bonuses to workers and the appreciation of the native forex towards the U.S. greenback. Nomura estimates that Samsung spent 700 billion received ($655 million) as bonuses to workers.
Fourth-quarter gross sales rose 24 per cent to 66 trillion received ($61.eight billion), additionally at a file excessive.
For all the yr, Samsung’s working revenue stood at 53.6 trillion received ($50.2 billion), a 83-per cent surge from 2016, on gross sales of 239.6 trillion received ($224.2 billion), up 19 per cent from the earlier yr.
What drove Samsung’s monstrous yr was the corporate’s semiconductor division, which has been cashing in on the skyrocketing demand and costs of reminiscence chips. The world’s demand for extra storage for photos, movies, recordsdata and different digital knowledge of their devices and servers, in addition to demand for extra computing energy to run many packages quicker, pushed up demand for reminiscence chips which might be dominated by Samsung.
Samsung controls about half of the world’s DRAM reminiscence chips that briefly maintain knowledge and assist computer systems run many packages on the identical time, and about one third of the world’s NAND chips, which retailer recordsdata. It was the largest beneficiary of the leap in costs of these reminiscence chips in 2017.
The stellar monetary achievement has coincided with Samsung’s administration disaster. Its de facto chief Lee Jae-yong, a grandson of Samsung’s founder and the one son of the ailing Samsung chair, is preventing at an appeals court docket to overturn his five-year jail sentence for bribery and different costs. Lee has been in jail for practically a yr.
The corporate made main administration adjustments in November. After Samsung’s longtime head of the semiconductor division provided to resign, the heads of the cell enterprise and TV divisions additionally stepped down. These three divisions at the moment are helmed by youthful leaders.