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Samsung investor hopes go up in flames despite record profits

Samsung revealed overnight it is in line to make record annu..

Samsung revealed overnight it is in line to make record annual profits.

But quarterly profits missed expectations as staff bonuses and a strong currency took some gloss off a buoyant chip market.

The South Korean electronics giant said fourth-quarter operating profit would be 15.1 trillion (£10.4bn) won, a jump of 64 per cent, but below consensus expectations of 15.9 trillion won. Sales of 66 trillion won were also narrowly behind analyst forecasts.

Full-year profits will be 53.6 trillion won, compared with 29.2 trillion won in 2016, Samsung said.

A record annual return caps a quick turnaround for Samsung, which endured a tumultuous second half to 2016 after the embarrassing withdrawal of its Galaxy Note 7 handsets. The firm took the mobiles off the market over fears they were self-combusting.

But investors focused on the fact Samsung missed expectations, with shares sliding two per cent in South Korean trading.

Read more: Samsung's back with a big, slick, non-flaming Galaxy Note

“The currency effect and bonuses appear to be the main reason for missing market forecasts but smartphone shipments are also likely to be lower than expected,” Song Myung-sup, an analyst at HI Investments & Securities told Reuters.

“Considering Apple and Chinese firms’ sales weren’t stellar either, overall demand appears to have been sluggish.”

The strength of the won – which hit a three-year high yesterday – and bonuses dented profits by about 400 billion won, analysts said.

Read more: What Samsung's doing with all those exploding Galaxy Note 7s it recalled

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