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Samsung says Galaxy S8 pre-orders are better than the S7, shares rise

  • Samsung mobile chief DJ Koh said Galaxy S8 orders are "better than expected"
  • Shares were 1.24 percent higher
  • Comments show that Samsung has weathered the Note 7 storm

Samsung Electronics shares got a boost on Thursday after the technology giant's mobile chief said pre-orders for the flagship Galaxy S8 smartphone had exceeded those for the previous S7 device.

Shares were trading around 1.24 percent higher at 2.1 million Korean won near the end of the trading day in South Korea.

The Galaxy S8 goes on sales on April 21 in South Korea, the U.S. and Canada but pre-orders are already open and give an indication of the kind of demand the device will see.

"It's still a bit early, but initial response to the pre-orders that have begun at various places across the world have been better than expected," Koh Dong-jin, the head of Samsung's mobile division, said at a media briefing, according to Reuters.

It's positive news for the electronics titan after fears that the Note 7 scandal, in which devices caught fire and were eventually recalled and discontinued, could dent confidence in the brand. Samsung appears to have weathered that storm.

Counterpoint Research expects Samsung to ship close to 50 million of the devices in 2017. That would be more than the 48 million S7 and S7 Edge models shipped by Samsung, according to IHS Markit.

Koh's comments come after Samsung confirmed to CNBC on Monday that pre-orders for the Galaxy S8 were more popular than the S7 in the U.S.

A view of the new Samsung Galaxy S8 at its Samsung launch event, March 29, 2017 in New York City.
Drew Angerer | Getty Images
A view of the new Samsung Galaxy S8 at its Samsung launch event, March 29, 2017 in New York City.

Samsung's shares are up more than 70 percent in the last year, thanks in part to its strong earnings and continued diversification of its business. The company has been focusing on its memory chip division and display technology, which it is reportedly selling to Apple for its anniversary edition iPhone. But Samsung's mobile business still makes up a large chunk of revenues and the pre-order information has been taken positively by investors.

Last week, Samsung released earnings guidance in which it said it expects a nearly 50 percent jump in operating profit in the January-March quarter. Analysts are expecting Samsung to report a record high profit in the second quarter thanks to the Galaxy S8.

Koh also said that Samsung will use the Galaxy S8 to recover in China, according to Reuters. Samsung has struggled to get into the top five smartphone vendors list in the world's second-largest economy in recent years due to increased competition from domestic brands like Oppo, Vivo and Huawei.