Samsung Profits Surge 50% Despite Galaxy Note 7 Fiasco

Samsung Electronics has announced that its profit in Q4 of 2016 surged 50% despite the fiasco with its flagship Note 7 phone.

Analysts had expected the company’s profits to surge thanks to its mainstay semiconductor business, but the result surpassed even the most optimistic forecasts. The semiconductor division cashed in on strong demand and a tight supply for microchips during the September-December period, likely contributing to more than half of its quarterly earnings.

The earnings estimate would mark Samsung’s highest quarterly profit since 2013.

In October 2016, the world’s largest smartphone maker had to scrap the Note 7 after batteries caught fire and even replacement devices went up in smoke.

Samsung said it expected to post 9.2 trillion won ($7.8 billion) in operating profit for the months from September to December.

In an earlier profit forecast for the fourth quarter, Samsung had said it expected the Note 7 recall would mean a $2.1 billion hit to their profits.

Samsung first issued a recall for the Galaxy Note 7 in September following complaints about exploding batteries.

After replacement devices deemed safe were also found to overheat and catch fire, Samsung scrapped the phone entirely.

The company said that it will “very soon” share details of its inquiry into the cause of the Note 7 problems.

Samsung will disclose a detailed earnings release for Q4 of 2016 in late January which will give more insights into the performance of its individual businesses.