Samsung Electronics forecasts record profits for Q4 of 2017, but the estimate missed analyst expectations.
The world’s biggest memory chip maker forecast operating earnings of 15.1 trillion won ($14.1billion) – up 64% from a year earlier.
However, while chip prices boosted margins, a stronger won weighed on the figures.
The record guidance comes despite a corruption scandal engulfing Samsung top leadership.
The operating profit forecast is slightly below the 15.9 trillion won estimated by analysts surveyed by Reuters.
The forecast keeps the South Korean company on track for record annual profits, in a year when prices for computer memory chips kept surging.
However, the 2018 outlook is less certain, with Samsung shares having fallen nearly 10% from their all-time high in November, as some investors bet on an end to the chip boom.
Meanwhile, the market for smartphones and other mobile devices is facing increasing competition from Chinese rivals.
As well as the jailing of its heir apparent Lee Jae-yong for bribery and corruption, Samsung’s reputation was also hit by the global recall of its flagship Note 7 smartphone in 2016, following the fiasco with its overheating and exploding batteries.
However, the problems with the handset did not cause major disruption to Samsung’s finances, helped by its chip business as well as customers seeming unfazed by the incident.
Samsung Electronics is regarded as the jewel in the crown of the Samsung Group conglomerate, which is made up of 60 interlinked companies and is one of South Korea’s massive family-run businesses known as chaebols.
Samsung VP Lee Jae-yong has been questioned for a second time as a suspect in South Korea’s biggest political corruption scandal.
Prosecutors are expected to decide based on the hearing whether they will seek an arrest warrant for Lee Jae-yong.
Samsung is accused of giving donations to non-profit foundations run by a confidante of President Park Geun-hye in exchange for political favors.
Lee Jae-yong told reports before the hearing: “I will once again tell the truth.”
He had already been questioned with several other company executives in January but a subsequent court ruling decided there were insufficient grounds for an arrest.
Image source Wikimedia
Yet during the past weeks investigators reviewed the case and decided there were new aspects that required further questioning.
The claims against Samsung revolve around a merger between the electronics giant’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
The prosecution alleges that Samsung gave 2.8 million euros ($3.1 million) to a company co-owned by President Park Geun-hye’s confidante Choi Soon-sil and her daughter, in return for political support for the deal.
The scandal led to President Park Geun-hye being impeached in December 2016.
Lee Jae-yong, also known as Jay Y. Lee, first gave evidence in front of a parliamentary hearing in December 2016. Since January he has been treated as an official suspect in the case.
At the parliamentary hearing, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors in return.
Lee Jae-yong also confirmed Samsung gave a horse and money to help the equestrian career of Choi Soon-sil’s daughter, Chung Yoo-ra, something he said he now regretted.
Choi Soon-sil is on trial for charges including corruption and coercion.
A South Korean court has refused a request by prosecutors to issue an arrest warrant for Samsung Electronics Vice-chairman Lee Jae-yong.
On January 19, the judge ruled that there was insufficient reason to arrest Lee Jae-yong over accusations of bribery, embezzlement and perjury.
Lee Jae-yong, known professionally as Jay Y. Lee had been waiting for the ruling overnight since a hearing on January 18.
The allegations were part of a corruption scandal which led parliament to impeach President Park Geun-hye.
Samsung Electronics, which has consistently denied any wrongdoing, said in a statement that the “merits of this case can now be determined without the need for detention”.
President Park Geun-hye is accused of abusing her position by colluding with her close friend Choi Soon-sil to use their relationship to secure millions of dollars from major companies. The money was allegedly paid into Choi Soon-sil’s non-profit foundations in exchange for favorable government treatment.
Image source Wikimedia
Prosecutors allege that Samsung paid 43 billion won ($36.3 million) to secure government support for a controversial merger of two of its affiliates.
Samsung has acknowledged making the payments but insists it did not expect anything in return.
South Korea’s special prosecutors had declared Lee Jae-yong a criminal suspect and made a formal request for an arrest warrant earlier this week.
However, the judge ruled that after reviewing the evidence it was “difficult to acknowledge the necessity and substantiality of an arrest at the current stage”.
Opposition lawmakers said the decision was “regrettable” and ignored the strength of public sentiment.
Correspondents say prosecutors’ hopes of stretching criminal proceedings to include President Park Geun-hye may have been knocked off course by the refusal to issue a warrant against Lee Jae-yong.
Samsung is South Korea’s most high-profile company, and its sales are equal to about a fifth of the country’s GDP.
Park Geun-hye, who has faced massive public protest in recent months, has been stripped of her presidential powers while the constitutional court considers her impeachment.
South Korea’s special prosecutor is seeking an arrest warrant for Samsung Electronics vice-chairman Lee Jae-yong, on bribery charges.
The Lee Jae-yong case is linked to a scandal that led to the impeachment of South Korean President Park Geung-hye.
Samsung is accused of giving donations to non-profit foundations operated by Choi Soon-sil, a close friend of Park Geun-hye, in exchange for government favors.
The donations were allegedly made as Samsung sought political support for a merger.
Lee Jae-yong, known professionally as Jay Y. Lee, was questioned for more than 20 hours at the prosecutor’s office in Seoul last week.
Jay Y. Lee is currently vice-chairman of Samsung Electronics, but since his father, Lee Kun-hee, suffered a heart attack in 2014, he is considered de facto boss of the entire Samsung Group conglomerate.
Image source Wikimedia
The news sent Samsung shares lower, with Samsung Electronics stocks down 2% by midday in Seoul, and parent firm Samsung C&T down 0.8%.
A spokesman for the special prosecutor’s office acknowledged the arrest of Lee Jae-yong could be damaging for one of South Korea’s biggest business but said “while the country’s economic conditions are important, upholding justice takes precedence”.
The claims against Samsung center on a controversial merger between the electronics giant’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
Prosecutors allege that Samsung gave money to a company co-owned by Choi Soon-sil and her daughter, in return for Park Geun-hye’s support for the deal.
At the parliamentary hearing in December, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors.
During that hearing, Lee Jae-yong also said Samsung had made separate payments to help fund Choi Soon-sil’s daughter’s equestrian career, including buying an $850,000 horse – something the Samsung executive says he regrets.
Earlier in the day, the special prosecutor indicted South Korea’s National Pension Service (NPS) chairman Moon Hyung-pyo on charges of abuse of power and giving false testimony.
The NPS is the world’s third-largest pension scheme and was a major shareholder in the two Samsung Group affiliates. It is claimed Moon Hyung-pyo pressured the organization to back the deal – something the NPS has denied.
Samsung Electronics vice chairman Lee Jae-yong has been quizzed at the prosecutor’s office in Seoul as a suspect in South Korea’s biggest political corruption scandal involving President Park Geun-hye.
Samsung is accused of giving donations to several non-profit foundations operated by Choi Soon-sil, a close friend to President Park Geun-hye.
The donations were allegedly made in exchange for political support of a controversial merger.
The Choi Soon-sil scandal has led to President Park Geun-hye being impeached by South Korea’s parliament last month.
Image source Wikimedia
Lee Jae-yong told reporters upon arriving on January 12: “I deeply apologize to the people for failing to show a positive image because of this incident.”
Earlier this week two other Samsung executives were questioned by the special prosecutors, but were treated as witnesses rather than suspects.
The claims against Samsung circle around a merger between the electronics giant’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
Prosecutors allege that Samsung gave €2.8 million euros ($3.1 million) to a company co-owned by Choi Soon-sil and her daughter, in return for Park Geun-hye’s support for the deal.
Lee Jae-yong, known professionally as Jay Y. Lee, has already given evidence to politicians over the scandal, but this is the first time he has been questioned as a suspect by investigators.
At the parliamentary hearing in December, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors.
Jay Y. Lee also confirmed Samsung gave a horse and money to help the equestrian career of Choi Soon-sil’s daughter, Chung Yoo-ra, something he said he now regretted.
Choi Soon-sil is on trial for charges including corruption and coercion.
President Park Geun-hye’s position began to unravel in October 2016, when details of her friendship with Choi Soon-sil began to emerge.
They included revelations that Park Geun-hye had allowed Choi Soon-sil – who holds no government role – to edit political speeches.
Since then, hundreds of thousands of protestors have gathered every weekend in Seoul to demand Park Geun-hye’s resignation.
Park Geun-hye denies wrongdoing but has apologized for the way she managed her relationship with Choi Soon-sil, who also denies committing criminal offences.
Lee Jae-yong, known professionally as Jay Y. Lee, is the grandson of Samsung founder Lee Byung-chul, son of current chairman Lee Kun-hee.
Aged 48, Lee Jae-yong has spent his entire career in the company and is vice chairman of Samsung Electronics.
Image source Wikimedia
Lee Jae-yong is currently vice-president of Samsung Electronics. But since his father, Lee Kun-hee, suffered a heart attack in 2014, he is considered de facto boss of the entire Samsung Group conglomerate.
In 2015, Lee Jae-yong was nominated to join the board of Samsung Electronics – an appointment confirmed on October 27.
He is widely expected to take overall control of Samsung once his 74-year-old father steps down.
Critics say Lee Jae-yong’s position on the board is due to his birth, not his business experience.
Samsung Electronics’ vice-president and heir-apparent Lee Jae-yong is to be quizzed as a suspect in a corruption scandal surrounding the impeached South Korean president, Park Geun-hye.
The tech giant is accused of giving donations to non-profit foundations operated by Choi Soon-sil, a close friend of President Park Geun-hye.
Samsung’s donations were allegedly made in exchange for political support of a controversial merger.
Lee Jae-yong will face special prosecutors on January 12, officials said.
Samsung declined to comment.
Since his father, Lee Kun-hee, suffered a heart attack in 2014, Lee Jae-yong, 48, is considered de facto chief of the entire Samsung Group conglomerate.
Image source Wikimedia
On December 9, the South Korean parliament voted to impeach President Park Geun-hye over the scandal – a decision the country’s constitutional court has six months to uphold or overturn. Until then Park Geun-hye remains formally president but stripped of her powers, which are handed to the prime minister, a presidential appointee.
The claims circle around a merger between Samsung’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
Prosecutors allege that Samsung gave €2.8 million euros ($3.1 million) to a company co-owned by Choi Soon-sil and her daughter, in return for Park Geun-hye’s support for the deal.
Lee Jae-yong has already given evidence to politicians over the scandal, but this is the first time he will be interviewed as a suspect by investigators.
At the parliamentary hearing last month, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors.
Lee Jae-yong also confirmed Samsung gave a horse and money to help the equestrian career of Choi Soon-sil’s daughter, Chung Yoo-ra, something he said he now regretted.
Earlier this week two other Samsung executives were questioned by the special prosecutors, but were treated as witnesses rather than suspects.
Park Geun-hye’s position began to unravel in October last year when details of her friendship with Choi Soon-sil began to emerge. They included revelations that the president had allowed her old friend – who holds no government role – to edit political speeches.
Since then, hundreds of thousands of protestors have gathered every weekend to demand President Park Geun-hye to resign.
Park Geun-hye denies wrongdoing but has apologized for the way she managed her relationship with Choi Soon-sil, who also denies committing criminal offences.
Choi Soon-sil has been charged with coercion and attempted fraud.
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