Samsung Electronics' profit estimates affected by recall of Note 7

Operating profit for the quarter would now be $4.6 billion
Galaxy note 7, Samsung, Samsung revenues, Samsung sales

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Samsung Electronics has announced its revised earnings guidance for the third quarter of 2016.

After recent incidents and in consideration of consumers’ safety, Samsung Electronics stopped sales, exchanges and production of the Galaxy Note 7. This has impacted the third quarter earnings.

The revised numbers are approximately 47 trillion Korean won for consolidated sales and approximately 5.2 trillion Korean won for consolidated operating profit. The numbers released earlier this month were approximately 49 trillion Korean won for consolidated sales and approximately 7.8 trillion Korean won for consolidated operating profit.

“This shows that the earnings of the mobile division were wiped out by the recall cost and lost sales,” said Kim Young-woo, an analyst at SK Securities (source: Financial Times). “The company seems to have written off all development and marketing costs related to the Note 7 to clear uncertainties.”

 

 

 

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