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Samsung Electronics on Thursday reported its best quarterly operating profit in more than three years, driven by strong prices of memory chips and flat panel displays.

Net profit for the first three months of this year jumped 46.29 per cent to Won7.68tn ($6.8bn) as sales increased 1.54 per cent to Won50.5tn. Operating profit surged 48.27 per cent to Won9.9tn.

The semiconductor division was the biggest driver of earnings, accounting for nearly two thirds of operating profit. Operating profit from Samsung’s chip division jumped from Won2.63tn a year earlier to Won6.31tn, while its display business posted Won1.3tn in operating profit after suffering an operating loss of Won270bn a year earlier.

Samsung remains optimistic about its near-term outlook. “Looking ahead to the second quarter, the company expects to achieve growth on the back of continued robust memory performance together with improved earnings from the mobile business following the global rollout of the Galaxy S8 and S8+,” the company said in a statement.

The company also expects an earnings increase for the full year as components supply is likely remain tight throughout the year while demand for powerful memory chips and premium screens remain strong on the popularity of interconnected devices.

Samsung is now counting on the new flagship smartphone, which went on sale on April 21, to help salve its bruised image following last year’s costly safety debacle and ultimate demise of the fire-prone Galaxy Note 7 smartphone. The company said the new phone, featuring an improved design and many upgraded features, is outselling its predecessor S7 device, which shipped 48.5m units in its first year.

Samsung said its board of directors had approved the second phase of a share buyback and cancellation of 900,000 common shares and 225,000 preferred shares, which will take around three months starting from April 28.

Shares of Samsung fell 1.07 per cent to Won2.117m on Thursday morning after hitting a record high on Wednesday, as investors shrugged off turmoil at home where the company’s de facto leader Lee Jae-yong is standing trial for corruption charges.

Copyright The Financial Times Limited 2017. All rights reserved.
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