Date
11 December 2017
Samsung shares have risen about 45 percent this year, as the company shrugged off last year’s global recall of fire-prone Galaxy Note 7 devices. Photo: Reuters
Samsung shares have risen about 45 percent this year, as the company shrugged off last year’s global recall of fire-prone Galaxy Note 7 devices. Photo: Reuters

Samsung investors expect strong earnings — and answers

Samsung Electronics Co. is expected to deliver all-time high profits when it reports third-quarter results on Tuesday, the Wall Street Journal reports.

But many investors will be less focused on the results than eager for answers over who will lead the company to future success—and how.

In a surprise move earlier this month, one of the Samsung’s top executives, Kwon Oh-hyun, said he would soon resign, deepening a leadership crisis atop a company where the chairman is incapacitated, the de facto leader is imprisoned and the conglomerate’s powerful strategy group is disbanded.

Kwon’s successor as chief executive of Samsung’s thriving components division is expected to be named in coming days, analysts say.

But a broader leadership shake-up, beyond Kwon, is under consideration with the company’s board, according to people familiar with the matter. No final timeline has been set for the moves, which would restock Samsung’s top rung with younger executives, the people said. But Samsung has previously reshuffled management in December.

A Samsung spokeswoman declined to comment.

Kwon, a 65-year-old who also has the title of vice chairman, hinted at change in his Oct. 13 announcement of plans to step down. Calling for a fresh start, Kwon said Samsung is “hard pressed to find new growth areas right now”.

The company’s current business lines, though, are thriving—especially sales of semiconductors and displays. Samsung is the world’s largest maker of smartphones, memory chips and televisions. Kwon is one of three co-CEOs, with the two others overseeing mobile devices and consumer electronics.

The Suwon, South Korea-based company expects operating profit of 14.5 trillion South Korean won (US$12.9 billion ) for the three months ended Sept. 30. The results would top the previous all-time high of 14.07 trillion won delivered in the previous quarter. Samsung shares have risen about 45 percent this year, as the company shrugged off last year’s global recall of fire-prone Galaxy Note 7 devices that ultimately cost it about US$6.5 billion.

Samsung’s robust earnings mirror the booming quarterly growth delivered last week by technology peers Google-parent Alphabet Inc., Amazon.com Inc. and Microsoft Corp.

While those firms are expanding into new businesses, Samsung is grappling with what steps to take next with the absence of its de facto leader, Lee Jae-yong, who was convicted in August for bribing South Korea’s former president. Lee has appealed the decision and is undergoing a higher court trial.

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