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.