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Samsung profit boosted by chips, sees better earnings from the S8

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By Euronews
Samsung profit boosted by chips, sees better earnings from the S8

<p>Samsung has posted solid profit in the first three months of the year boosted by strong demand for its memory chips.</p> <p>The South Korean firm’s share price rose 2.6 percent as it also flagged up stronger future earnings on top of first-quarter operating profit of 9.9 trillion won (8.01 billion euros). </p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">[1Q Results] Sales: <span class="caps">KRW</span> 50.55 trillion, consolidated operating profit: 9.90 trillion, net profit: <span class="caps">KRW</span> 7.68 trillion <a href="https://t.co/kVAN8ehYv8">https://t.co/kVAN8ehYv8</a></p>— Samsung Electronics (@Samsung) <a href="https://twitter.com/Samsung/status/857376938259644416">April 26, 2017</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <p>Samsung, which is the world’s top maker of memory chips, smartphones and televisions, has been going through difficult times with its boss, Jay Y. Lee, mired in a political corruption scandal and the financial hit from its fire prone Galaxy Note 7.</p> <p><strong>Counting on the S8</strong></p> <p>The mobile phone division’s profit almost halved between January and March compared to last year with no new handsets to generate meaningful sales. </p> <p>It is counting on the just launched and well received flagship Galaxy S8 to make up for the Note 7 failure.</p> <p>Pre-orders for the Galaxy S8 have been better than expected. Recent complaints about red-tinted screens and spotty Wi-fi connection on the S8 would not have a major impact on the bottom line, analysts said.</p> <p><strong>No split</strong></p> <p>Samsung rejected a call from US activist hedge fund Elliott to <a href="http://uk.reuters.com/article/us-samsung-elec-results-breakingviews-idUKKBN17T132">split itself in two</a> but accepted part of the fund’s proposals, revealing plans to cancel its existing treasury shares worth the equivalent of over 32 billion euros by 2018.</p> <p>Elliott welcomed the share cancellation and said it saw “room for even more progress”. The fund had called for Samsung to adopt a holding company structure by splitting itself in two, and to pay out a 30 trillion won (24 billion euros) special dividend.</p> <p>In rejecting Elliott’s call for a holding company structure, Samsung cited issues including regulatory and legal risks, and said it would not boost investor returns.</p> <p>“Samsung concluded the risks and the challenging environment surrounding a change in the corporate structure would not be beneficial for enhancing shareholder value and sustaining long-term business growth,” it said in a statement.</p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Samsung, under pressure to reform, throws investors a curve ball—and it works.<a href="https://twitter.com/timothywmartin"><code>timothywmartin</a> <a href="https://twitter.com/_eunyoungjeong"></code>_eunyoungjeong</a><a href="https://t.co/zvCDEKYALF">https://t.co/zvCDEKYALF</a></p>— Jonathan Cheng (@JChengWSJ) <a href="https://twitter.com/JChengWSJ/status/857574307542814722">April 27, 2017</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Samsung’s dismissal of a restructuring proposal from U.S. hedge fund Elliott does not quite add up: <a href="https://t.co/AMERuu2hu2">https://t.co/AMERuu2hu2</a> by <a href="https://twitter.com/JYang_in_HK"><code>JYang_in_HK</a></p>— Robyn Mak (</code>mak_robyn) <a href="https://twitter.com/mak_robyn/status/857453914475479042">April 27, 2017</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>