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Korean Broker Tells the Wall Street Journal: Samsung's Mobile Unit isn't out of the Woods Just yet

10. 15  PA  XTRA NEWS

Yesterday I posted a report titled "Samsung Struggles to Fix their Smartphone Woes" wherein I stated that "With analysts continually cutting expectations for Samsung, the company may be able to squeak out a nice make-believe recovery for Q3 if you haven't been following the downgrade cycle." Today we see that the lowered expectations made their profitable quarter look like there's a huge bounce back for Samsung. Yet let's not forget that Samsung has cut divisions to the bone and sold off assets. More importantly, it was Apple that assisted their profitable chip business this quarter by giving Samsung large iPhone 6s A9 processor orders. Without it, there would be much to sing about. The other key factor in Samsung's profit turnaround came from their display division. The mobile division wasn't even mentioned as it had no role in their profitable quarter. As we noted yesterday: Their smartphone woes – continue.


The Wall Street Journal reports that "While the mobile-phone business isn't likely to see a significant rebound as growth in global demand for smartphones cool amid saturated markets, Samsung's earnings are being powered by strong growth in its chip business due to tight supply and firm pricing, analysts say. Samsung's chip unit likely accounted for about half of the company's profit in the third quarter, analysts said, while strong sales of displays to Chinese smartphone makers also contributed to its bottom line."


C.W. Chung, an analyst with Nomura Securities in Seoul told the Wall Street Journal that "The mobile unit isn't out of the woods yet. Unless that changes, it won't be easy for Samsung to get back on an overall growth track."


10. 16 PA - Bar - Xtra News

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