Overheating

13 Oct 2017 By Robyn Mak Follow @mak_robyn

The tech group’s top executive unexpectedly resigned following record-smashing forecasts for operating profit. An early lead in memory chips has fuelled blistering earnings growth at Samsung despite legal woes. But as rivals circle, a widening leadership vacuum looks worrying.

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Samsung Electronics on Oct. 13 said its chief executive officer and vice chairman Kwon Oh-hyun has decided to step down from management when his term ends in March 2018.

"I believe the time has come for the company to start anew with new sprit and young leadership to better respond to challenges,” Kwon said in a press release.

Separately, the company said it estimates revenue for the quarter ending September to be 62 trillion won ($54.7 billion), a 30 percent year-on-year increase that beat analyst consensus forecasts.

Operating profit for the period was likely to total 14.5 trillion won ($12.8 billion), Samsung said - a new record and nearly triple the figure from a year earlier.

Samsung did not elaborate and will disclose detailed results at the end of October. Analysts believe the chip division will be the main profit driver, as it was last quarter.

Jay Y. Lee, the de facto leader of the wider Samsung Group and heir of the conglomerate's founding family, appeared in court on Oct. 12 to appeal his 5-year jail term. Lee was convicted in August of bribing Park Geun-hye, who was dismissed as president in March, and various other charges.

Context News

Samsung Electronics on Oct. 13 said its chief executive officer and vice chairman Kwon Oh-hyun has decided to step down from management when his term ends in March 2018.

"I believe the time has come for the company to start anew with new sprit and young leadership to better respond to challenges,” Kwon said in a press release.

Separately, the company said it estimates revenue for the quarter ending September to be 62 trillion won ($54.7 billion), a 30 percent year-on-year increase that beat analyst consensus forecasts.

Operating profit for the period was likely to total 14.5 trillion won ($12.8 billion), Samsung said - a new record and nearly triple the figure from a year earlier.

Samsung did not elaborate and will disclose detailed results at the end of October. Analysts believe the chip division will be the main profit driver, as it was last quarter.

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