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Published: Sat, April 07, 2018
Tech | By Dwayne Harmon

Samsung reports record profit

Samsung reports record profit

The new Samsung Galaxy S9 Plus mobile is shown during the Mobile World Congress in Barcelona, Spain February 27, 2018.

The record earnings have not been driven by smartphone sales as one would ordinarily assume but were mostly due to a high demand for memory chips.

South Korea's top tech giant and the leading company in Samsung Group, the country's largest family-run conglomerate, said through a regulatory filing that it aims to secure an additional 34.7 million shares in the shipyard.

Samsung, over the last one year, has seen record profits in its quarterly financial reports starting from the second half of 2017.

It also expects to bring in 15.6 trillion won in profits, beating analyst expectations and marking a record for the company. Samsung did not go into detail about its performance and will release final earnings results most likely in April 26.

Samsung shares fell as much as 2.7 percent on Friday before paring losses to close down 0.7 percent, compared to a 0.3 percent drop on the broader market.

The drawback came after investment firm UBS AG stated that it expects DRAM chips supplies to grow, which weakened Micron Technology Inc.'s shares by 6.6 percent to $49.84 percent on Thursday.

Analysts said memory chips were still the main driver of Samsung's profits, making up about 75 percent of its operating income, despite fears over the possibility that the industry cycle may have peaked.

The prices of NAND chips commonly used in mobile devices began falling late past year and analysts have been closely watching for signs of the peak in the DRAM price boom as well.

Analyst Greg Roh said lower prices could help raise the demand for chips, which Samsung has the cost-cutting ability to keep profits up.

Rumours are now circulating that Samsung is already working on its next Galaxy S9 model, following a new benchmark result shared on the website Geekbench.

Samsung's announced operating profit was 1 trillion won more than the market's consensus.

The first-quarter result, which includes the sales of its marquee Galaxy S9 smartphone unveiled in February, eases concerns about its display business after Apple sold fewer-than-projected iPhone X handsets with Samsung-made displays. She declined to comment further.

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