Samsung sees further $3b profit hit from Note 7 crisis


Seoul—Samsung said the crisis over its exploding Note 7 smartphones would cost another $3 billion-plus in lost profit over the next two quarters, but hoped expanded sales of its other flagship handset would help cushion the impact. The profit warning came two days after the South Korean electronics giant slashed its operating profit for the third quarter by $2.3 billion.
After a recall problem with the large-sized Galaxy Note 7 turned into a full-blown crisis, Samsung announced earlier this week that it was scrapping the model entirely a devastating move for a company that prides itself on the quality production of cutting-edge technology. On top of the third-quarter loss, Samsung said the drop in sales arising from the decision to discontinue the Note 7 would continue to impact profit margins in October-March including the crucial holiday buying season. It estimated an operating profit loss in the fourth quarter at around the “mid-2 trillion ($2.2 billion) won range” and 1.0 trillion won for the first quarter of 2017.
“Moving forward, Samsung Electronics plans to normalise its mobile business by expanding sales of flagship models such as the Galaxy S7 and Galaxy S7 edge,” the company said in a statement. Samsung announced a recall of 2.5 million units of the oversized Galaxy Note 7 smartphone in early September after several devices exploded or caught fire.—AFP