More than 50% of its profits are derived from its chip and OLED manufacturing business.

Despite the $1.8 billion Samsung has spent on recalling and replacing 2.5 million Galaxy Note 7s, the South Korean electronic giant has reported that it still expects a 5.6% increase in operating profit for the third quarter.

Samsung’s profits are likely to touch $7 billion (7.8 trillion won) for the period of July to September. This is up by 400 billion won for the same period in the previous year.

According to Young Woo Kim, an analyst at SK Securities, nearly 50% of Samsung’s revenues are generated from its display and chip business. After all, Samsung is the world’s biggest manufacturer of computer chips. It is also the world’s leading producer of OLED screens.

It certainly helps Samsung that its flagship smartphone, the Galaxy S7, uses the same screen as the Note 7. Due to the massive recalls, Kim opines that Samsung’s mobile business may have plunged to their lowest levels within the last 3 quarters.

The rise in quarterly earnings is despite the fall in mobile phone sales by 5% from a year earlier.