Samsung expects $3 billion impact in profits up to Q1 2017 after killing Galaxy Note7


Samsung today announced that it estimates to lose mid-3 trillion won ($3.1 billion approx.) in operating profit from the fourth quarter of 2016 through the first quarter of 2017, due to the discontinuation of Galaxy Note7.

Earlier this week the company revised its quarterly earnings guidance for Q3 2016 to cut operating profit by $2.3 billion, after it stopped sales of the smartphone.

Samsung is also offering up to a $100 total bill credit for a customer who exchanges a Note7 for any Samsung smartphone under its new Refund and Exchange Program.

Samsung said that it plans to normalize its mobile business by expanding sales of flagship models such as the Galaxy S7 and Galaxy S7 edge.

Regarding the impact in profit, Samsung said:

The company already allocated the expected direct cost from the discontinuation of Galaxy Note7 sales in its third quarter earnings guidance revision announced on Oct. 11, but 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.

Author: Srivatsan Sridhar

Srivatsan Sridhar is a Mobile Technology Enthusiast who is passionate about Mobile phones and Mobile apps. He uses the phones he reviews as his main phone. You can follow him on Twitter and Instagram