Technology

Samsung forecasts a strong quarter on the same day its CEO resigns citing “unprecedented crisis”



This post has been updated to reflect the announcement of Oh-Hyun Kwon's resignation.

Samsung Electronics made two announcements today that contrasted starkly with one other in tone. First, it is an optimistic third-quarter earnings guidance. Then, a few hours later, it posted a resignation letter from CEO and Vice Chairman Oh-Hyun Kwon, who said it is time for new leadership as the company faces a "unprecedented crisis inside".

In terms of earnings, the chaebol has had a good year so far, posting strong first and second-quarter results, thanks to its components business, Kwon also oversees. From a leadership perspective, however, Samsung has had a very difficult year. In August, Samsung vice chairman Jay Y. Lee, who was widely expected to replace his ailing father Lee Kun-hee as chairman of the Samsung Group, was sentenced to five years in jail after being convicted of looting, embezzlement, capital flight and falsehood charges.

Kwon, who started serving as Samsung Electronics' CEO in 2012, also plans to leave his employees and will not be re-election to its board.

In a letter to employees, Kwon wrote that his resignation "is something I was thinking long and hard about It is not a easy decision, but I feel I can no longer put it off. As we face confronted with unprecedented crisis inside, I believe that time has now come for the company start, with a new spirit and young leadership to be better responded to challenges from the rapidly changing IT industry. "

Kwon, who joined Samsung in 1985 as a researcher, added that "needs a new leader more than ever and it is time for me to move to next chapter of my life."

Despite the upheaval in its management ranking, Samsung was upbeat in its third-quarter earnings guidance today, forecasting consolidated operating profit of about 14.5 trillion Korean won ($ 12.8 billion). This amount represents a very healthy 179 percent increase from the 5.2 trillion won it in the third quarter of 2016, when its results were broken by the discontinuation of the Galaxy Note 7.

Samsung is expected to continue to sell parts to other smartphone makers, including Apple. Although Samsung products like the Galaxy series competes with iOS devices, For example, Samsung is the largest maker by volume of OLED displays, which Apple switched to its latest iPhones.

Samsung also forecast third-quarter consolidated sales of about 62 trillion won. It launched the Galaxy Note 8 one month ago, following the release of the Galaxy S8 and S8 Plus earlier this year.

Featured Image: Bloomberg / Contributor / Getty Images



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