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Samsung Profit Plunges Due to Galaxy Note 7 Fiasco

Samsung’s Galaxy Note 7 debacle has taken its toll on the South Korean firm’s bottom line.

The technology titan today admitted its operating profit plummeted 30 percent year-on-year thanks, in large part, to the global recall of its flagship Galaxy Note 7 Smartphone. The third-quarter results posted by the company this morning revealed a KRW 5.2 trillion ($4.6 billion) operating profit, a huge decrease from last year’s KRW 7.3 trillion. Samsung’s revenue — KRW 47.82 trillion ($42.03 billion) — had also dropped 30 percent year-on-year.

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Galaxy Note 7

“The mobile business saw its earnings decrease significantly due to the effects of the discontinuation of the Galaxy Note 7,” the company said in a press release.

Samsung earlier this month announced its decision to permanently end production of the Galaxy Note 7. The move came after a number of the supposedly safe replacement devices caught fire, making it obvious the faulty battery issue had not been fixed after all. The replacement Galaxy Note 7s were supposed to be unaffected by the battery manufacturing error that had caused the fires in the first batch of the now recalled devices released at the beginning of September.

But Samsung is not throwing in the towel on Smartphones.

The company said it will “strive to achieve comparable YOY earnings in the fourth quarter, helped by solid sales of the Galaxy S7 and S7 edge, while maintaining profitability in the mid-to-low end segment through increased shipments of new models. As for 2017, the company anticipates a turnaround with the launch of new flagship Smartphones.”

Samsung is also predicting its Networks business will enjoy “continued improvement in profitability on the back of 4G LTE expansion in markets around the world.”

The firm also plans to put more focus on its Consumer Electronics Division, which includes televisions and digital appliances. Samsung said there will be a number of new offerings in 2017 in a bid to increase sales.

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Jennifer Cowan

Jennifer Cowan is the Managing Editor for SiteProNews.