News
Troubled electronics giant now expects operating profit to decline compared to last year.
Samsung on Wednesday cut its third quarter financial forecast, a day after it killed off its troubled Galaxy Note 7 smartphone.
The Korean electronics giant expects revenue to come in at approximately 47 trillion won (€37.9 billion), down from an earlier guidance of KRW49 trillion issued last week. That compares to actual revenue of KRW51.7 trillion in the third quarter of last year.
Samsung also expects the Note 7 debacle to have a big hit on operating profit.
In last week’s earnings guidance, the company forecast operating profit of approximately KRW7.8 trillion (€6.3 billion). Now it expects operating profit of around KRW5.2 trillion. In Q3 2015, Samsung generated operating profit of KRW7.4 trillion.
Wednesday’s guidance cut is just the beginning of the fallout from Samsung’s decision on Tuesday to permanently halt production and sales of the Galaxy Note 7 due to a persistent battery problem that caused the device to catch fire.
The flagship smartphone went on sale on 19 August, but was pulled from sale again on 2 September following at least 35 reported cases of handsets smoking, smouldering, or catching fire.
Samsung began exchanging Note 7s for new versions which it said were fixed, but reports soon emerged of replacement devices suffering from the same problem.
On Tuesday, Samsung again pulled the handset from sale, and hours later it confirmed that it was killing the Note 7 off altogether.
