Samsung posts higher profit despite Galaxy 7 fiasco

Samsung Electronics posted its best quarterly profit in nearly four years despite its de-facto boss enmeshed in a political corruption scandal and taking a faulty Galaxy Note 7 off the market.

From January to March, Samsung estimated a 48 percent rise in profits of $8.8 billion from last year on strong sales of memory chips and flat-panel televisions. Sales rose to $44 billion in the quarter.

Samsung will release detailed first-quarter results later this month.

The memory chips and TV sales accounted for about 68 percent of Samsung’s operating profit in the final quarter of 2016.

The company is doing well despite recalling the fire-prone Galaxy Note 7 smartphone last fall.

“Earnings from components, especially semiconductors, are so strong that they can more than offset the huge losses from last year’s Note 7 failure,” said Lee Seung-woo, analyst at IBK Securities, to the Financial Times.

Samsung expects to bounce back in cellphone business with the introduction of new Galaxy S8 smartphone, which goes on sale on April 21. The S8 is the first Galaxy model to feature Samsung’s digital assistant, Bixby.

“We are very positive about the new phone. It will give a big boost for Samsung’s earnings from the second quarter,” said Lee.

Shares in Samsung hit record highs recently, gaining about 15 percent this year.

Samsung Vice Chairman Lee Jae-yong was arrested for a string of corruption charges, including bribery and embezzlement, linked to the impeachment of South Korea’s president, Park Geun-hye. He denied any wrongdoing in a preliminary hearing on March 9.

Korea is highly dependent on Samsung as its sales account for one-fifth of its gross domestic product.