Samsung's Profits Continue to Grow Despite Note 7 Recall


Samsung might be grappling with the fallout from its exploding Note 7 smartphones, but as a key supplier of displays and memory chips, the South Korean company showed it can rely on other phone makers and PC manufacturers to drive sales and profit.

The recall of the defective devices has dominated headlines since it was announced last month, and Samsung has worked to contain the fallout and insulate its component businesses. That helped maintain growth as new devices from rivals stoke demand for components. While Samsung appears to be remain on a firm footing amid the crises, a new challenge emerged this week when billionaire activist Paul Elliott Singer started a campaign to get the family-controlled company to restructure.

That, in addition to Friday’s estimate-topping preliminary earnings report, fueled a rise in Samsung’s shares to a record. By midday, the stock was up 0.5 percent at 1.7 million won. Operating income rose 5.5 percent to 7.8 trillion won ($7 billion) on a preliminary basis in the three months ended September, exceeding the 7.58 trillion-won average of analysts’ estimates compiled by Bloomberg.

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