Samsung estimates massive loss in wake of Note 7 flop

Samsung Electronics estimates a negative impact of about KRW mid-3 trillion (around EUR 2.83 billion) in operating profit from the fourth quarter of 2016 through the first quarter of 2017, due to the discontinuation of Galaxy Note7 sales. While Samsung has already allocated the expected direct cost from the discontinuation of Galaxy Note7 sales in its third quarter earnings guidance revision, the company expects the drop in revenue from the discontinued sales to continue to have a negative impact on operating profit for the next two quarters. The negative impact is estimated in the mid-2 trillion won range for the fourth quarter of 2016 and at approximately 1 trillion won for the first quarter of 2017. Moving forward, Samsung Electronics plans to normalise its mobile business by expanding sales of flagship models such as the Galaxy S7 and Galaxy S7 edge. Samsung also states that it will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes.