Samsung eyes profit upturn after smarthphone failure

Samsung expects profits to rise by 50% in the fourth quarter as it begins to recover from the Galaxy Note 7 debacle.

South Korean tech giant Samsung expects fourth-quarter profits to soar 50%. Picture: Jung Yeon-Je/AFP/Getty Images

The South Korean firm said it expects to record about £6.2 billion in operating profits in the three-month period, up from £4.1bn a year earlier.

In October, Samsung was forced to scrap its flagship Galaxy Note 7 smartphone because of concerns over consumer safety, with faulty units overheating and exploding due to a battery defect.

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Samsung scraps Galaxy Note7 phone over safety fears

The firm said it would cost billions to pull the smartphone off the market, but reassured investors it had enough cash to absorb the shock to its balance sheet.

Samsung expects sales to fall 1 per cent in the fourth quarter to £35.8bn and, for the full year, the tech giant forecasts a 10 per cent rise in its annual income.

Kim Young Woo, an analyst at SK Securities, said: “It’s thanks to the improvement in semiconductors and displays on top of favourable foreign exchange rates.”