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It's Make or Break for Samsung Amid Bribery Charges and the Note 7 Fiasco

It's make or break time for Samsung as the company seeks to rebound after a number of high-profile embarrassments.
Foreign visitors look around at a showroom displaying Samsung Electronics' products at the company's headquarters in Seoul
REUTERS/Truth LeemREUTERS

It's make or break time for Samsung as the company seeks to rebound after a number of high-profile embarrassments.

The South Korean electronics company is set to report earnings Tuesday morning local time after what has arguably been the most blemished few months in the company's history, marred by a corruption probe and the Galaxy Note 7 fiasco.

Lee Jae-yong
Lee Jae-yong, center, vice chairman of Samsung Electronics, speaks as he arrives Thursday, Jan. 12, 2017, to be questioned as a suspect in a bribery case.Ahn Young joon / AP

Related: Samsung Finally Explains the Galaxy Note 7 Exploding Battery Mess

"If Samsung can not have any new corporate disasters or safety issues with their products, and come out with a very compelling eighth generation series smartphone, I think they will weather the storm," Patrick Moorhead, principal analyst at Moor Insights & Strategy, told NBC News. "If not, it could be trouble."

Samsung struck a contrite tone at a press conference in Seoul on Monday, where the company shared the results of an investigation into what caused two iterations of the Galaxy Note 7 to catch fire.

"On the whole, they [Samsung] showed people what happened, why it happened and their eight-step program to improve battery safety," said Moorhead.

Shareholders seemed appeased by the news, with Samsung's stock rallying 2.31 percent at 1,903,000 won during the close of the Korea Stock Exchange on Monday.

But exploding phones may be the least of Samsung's worries.

Bribery and Embezzlement Scandal

A number of Samsung's executives have been questioned in a bribery and influence-peddling probe that resulted in the impeachment of South Korea's president.

Prosecutors allege Samsung heir Lee Jae-yong may have made donated millions of dollars to a close friend of the president, in exchange for government support of a controversial merger between two Samsung affiliates in 2015.

Related: South Korea Seeks Arrest of Samsung Chief Suspected of Bribery

Samsung is South Korea's largest chaebol, or family-owned business conglomerates. The company is so influential, it accounts for around one-fifth of the country's GDP, according to reports.

After being detained for questioning, a judge declined the prosecution's request to arrest Lee. However, the case is still ongoing.

A Samsung representative did not immediately respond to NBC News' request for comment.

While the corruption investigation may not taint the company's brand in the United States, where the executives being questioned aren't household names, Moorhead said it could have a "negative impact" on the brand in South Korea.

All of this comes ahead of the Mobile World Congress in Barcelona next month, where Samsung has a track record of introducing new Galaxy S series smartphones.

The company will break from its usual schedule and won't unveil a new phone next month, Reuters reported.

But it's not all bad news for Samsung.

During an earnings call Tuesday morning, the company is on track to post a 50 percent increase in operating profit for the fourth quarter, compared to the same time in 2015.