Hit by Note 7 blues, Samsung cuts profit forecast by a third
October 12, 2016 22:35
Hit by product safety failure issues on its flagship Note 7, the world's largest smartphone maker Samsung has cut its quarterly operating profit forecast by a third.
According to the company's website, Samsung has lowered its operating profit forecast from 7.7-7.9 trillion Korean won to 5.1-5.3 trillion Korean won, translating into a hit of a whopping 2.6 trillion Korean won or USD 2.3 billion.
The consolidated sales estimate has also been lowered by 2 trillion Korean won (USD 1.7 billion) to approximately 47 trillion Korean won, after the company decided to permanently halt sales of the troubled Note 7 device, in less than two months after its launch.
"After recent incidents and in consideration of our consumers safety, Samsung Electronics has stopped sales, exchanges and production of the Galaxy Note 7," the company had said.
The revised pre-earnings guidance reflects the impact of this decision on the third quarter earnings, it added.
Samsung had announced the recall of 2.5 million Note 7 devices in early September following reports of the phones catching fire.
It took a call to stop the production of the device, a move that analysts are calling one of the costliest product safety failures in tech history.
Samsung led the global smartphone market among handset makers in terms of shipment with a 22 per cent share at the end of June 2016 quarter, as per research firm IDC.
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