Surprise! All the trouble Samsung has had with its Galaxy Note 7 — the non-recall, the official recall, scrapping the production of the devices, and finally, the recall of replacement phones — is going to hit the company where it hurts: right in the piggy bank.
Samsung Electronics said today that it’s expecting to take a $3 billion loss in operating profits over the next two quarters after putting the permanent kibosh on Note 7 production due to the tendency for the devices to suddenly start smoking or explode.
According to the company, the profit reduction linked to the decision to drop the Note 7 is expected to be in the mid-2 trillion won (about $2.2 billion U.S.) in the October-December period of this year, and around $1 trillion won (about $900 million) for the first quarter of next year.
The company has been shifting its profit estimates ever since it recalled millions of Note 7 devices and stopped production on the phones: on Wednesday, Samsung cut its profit estimates for the third quarter from 7.8 trillion won ($6.8 billion) down to 5.2 trillion won (about $4.6 billion), The New York Times notes.
“Moving forward, Samsung Electronics plans to normalize its mobile business by expanding sales of flagship models such as the Galaxy S7 and Galaxy S7 edge,” the company said in today’s announcement. “Additionally, the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes.”
by Mary Beth Quirk via Consumerist
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