Samsung posts 48% profit jump — but it’s all down to components not smartphones

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Despite the Galaxy Note 7 saga and the arrest of its defacto head on bribery charges, Samsung’s business has bounced back.

The company just announced its first quarter financial results, and they are as impressive as it had forecast earlier this month.

Operating profit for the quarter rose by 48 percent year-on-year to reach 9.9 trillion KRW, or approximately $8.7 billion. That makes the period its second most profitable quarter ever, and its most profit Q1 in history. Total revenue for the three-month period was 50.55 trillion KRW, around $44.5 billion, which represented a more modest two percent increase over a year previous.

While Samsung is best known for consumer-facing electronics business, and in particular its mobile devices, the company said its strong performance was driven by its components business. In particular, its semiconductor and display divisions performed well, while it said that demand for memory and display chips also rose in the quarter.

Ultimately, Samsung’s mobile business actually saw a revenue drop. That’s not a huge surprise given the recall of the Galaxy Note 7 for its exploding battery, but also a sales slump is common before the launch of any new flagship device. The first quarter of 2017 was the period right before the introduction of the Galaxy S8 series, which went on sale to the public in an initial four countries last week.

Samsung said in a statement that it expects another quarter of growth for Q2, thanks to a full period of sales for the Galaxy S8 and S8+ and continued demand for its memory components. For the full year — which still has nine months to run — it is anticipating earnings growth thanks to its component business, and its OLED panel displays as well as memory chips.

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