Samsung expects huge losses due to scrapping Note7 production

Samsung said Friday it expects massive profit losses through the first quarter of 2017 after pulling the plug on its problem-plagued Galaxy Note 7 smartphone.

The discontinuation of production is estimated to cost the South Korean tech giant 3.5 trillion won (3 billion dollars) in operating profit from the fourth quarter of 2016 through the first quarter of 2017, Samsung said in a statement. Samsung had allocated the cost from the discontinuation of sales of the Galaxy Note7 in its third quarter earnings guidance revision which was announced on October 11, but said it expects the drop in revenue 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," the firm said. Samsung only began selling the phone on August 19, but said Tuesday it was discontinuing production following a global recall and multiple reports of some of the devices catching fire.

The 940-dollar device was aimed at the premium end of the market, where it was intended to compete with Apple's iPhone.

Last update: Fri, 14/10/2016 - 12:38
Author: 

More from Science & Tech

Electric car manufacturer Tesla recalls charging adapters

US electric car manufacturer Tesla on Tuesday issued a recall of charging adapters for its electric cars which could...

Facebook, Twitter, YouTube to share terrorist content database

Internet giants Facebook, Twitter, Microsoft and YouTube plan to develop a shared database of deleted content deemed...

Lost Russian space freighter sought in Siberia, near Mongolian border

Search teams on Friday were looking for a missing Russian space freighter believed to have crashed in southern...

Reddit to crack down on "toxic" Trump users

US-based news sharing and discussion website Reddit will take action against "toxic users," in particular some of...

Facebook accidentally deletes some of founder Zuckerberg's posts

The social media website Facebook accidentally deleted posts by its founder Mark Zuckerberg on Tuesday, including...