Samsung forecasts bumper profits as CEO resigns

Samsung CEO Kwon Oh-hyun

Samsung CEO Kwon Oh-hyun

The CEO of Samsung Electronics - Oh-Hyun Kwon - has thrown in the towel, citing an "unprecedented crisis" at the company as his reason, reports (Banking Technology's sister publication).

Samsung Electronics has not yet announced a replacement.

Samsung has two other CEOs, each overseeing its mobile phone business and home appliance division. While Samsung was battered previous year following the Galaxy Note 7 debacle, it seems to have bounced back and will soon announce a much rosier financial position.

Samsung Electronics' CEO has announced his surprise resignation from the company.

The company forecast bumper quarterly earnings on Friday, putting it on track to post a record operating profit for the period.

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The obvious elephant in the room is the corruption scandal in South Korea that resulted in Samsung vice-chairman Jae-Yong Lee being sentenced to five years in prison for bribing the government. But in his resignation letter Kwon explained that because Samsung is facing "unprecedented crisis inside out", the time has come for the company to "start anew, with a new spirit and young leadership".

Amazingly, Kwon's move was announced almost simultaneously with Samsung's third-quarter guidance, which predicted a record operating profit due largely to its business of producing chips and other components for mobile devices-a division that Kwon helped build. Semiconductors accounted for $7.2 billion during the quarter, Reuters reported, marking the company's top-performing business. "It has not been an easy decision, but I feel I can no longer put it off", said Kwon.

However, in a sign of good news for the company, its estimated operating profits for the third quarter of 14.5 trillion won (US$12.8 billion) marked a record for quarterly profit, almost tripling the 5.2 trillion won earned a year earlier.

The company's main products - DRAM and NAND memory chips used in smartphones - have also seen an increase in shipments and prices. The group has not made any radical changes in its leadership since 2014 when the current chairman Lee Kun-Hee suffered a heart attack that left him bedridden.

Kwon is chairman of Samsung's board, but not its overall chairman. Hearings on his appeal and those of four other convicted Samsung executives began October 12.

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