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Samsung Reports Record Quarterly Earnings

Samsung Electronics SSNLF reported Friday that it expects to earn record quarterly earnings. The company said its profits are likely to top 14 trillion Korean won, or $12.1 billion, beating analyst expectations.

The South Korean company cites rising demand for its memory chips and strong Galaxy S8 sales for its record quarter. These second-quarter earnings represent a 72% increase from the same period a year ago, which will help add to the stock’s 32% year-to-date gains.

While Samsung’s market cap is still nowhere near Apple’s AAPL, Samsung is still competing well with the tech giant. At Seoul’s trading close, Samsung was valued at just over 348 trillion won, or $300 billion, whereas Apple is currently worth over twice as much at $745 billion. However, shares of Samsung have outpaced Apple’s gains by 10% in the last year and 85% in the past two years.

Samsung is also expected to overtake Intel Corp. INTC as the world’s number one chipmaker by revenue. Samsung is estimated to have made about $15 billion in total semiconductor sales, whereas Intel made $14.4 in chip sales this past quarter. Intel has held the number one position since 1991, but Samsung has benefitted from rising memory chip prices.

In light of these earnings, Samsung plans to invest $18.6 billion into its semiconductor operations in South Korea.

Samsung’s record profits bring good news to a company that has been suffering from bad press this past year. Last September, Samsung issued a recall of its Galaxy Note S7 after defects in the phones’ batteries caused them to overheat, catch fire, and even explode. These issues wiped out much of Samsung’s third-quarter profit last year.

However, the company still faces questions about a corruption scandal. Mr. Lee, a vice chairman of Samsung, stands accused of bribing the former South Korean president, Park Geun-hye, for government approval of a merger in 2015.

Samsung’s second quarter results will be published later this month on July 28th.

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