Published on October 27th, 2016 | by The GC Team0
Samsung profits down 30% after Note7 recall
Samsung Electronics today posted a 30% fall in third-quarter profits after the recall of its Galaxy Note7 smartphone.
Operating profit fell to KRW 5.2 trillion, from KRW 7.39 trillion in the same quarter last year. Sales dropped from KRW 51.68 trillion to KRW 47.82 trillion.
The IT & Mobile Division posted KRW 22.54 trillion in consolidated revenue and KRW 0.10 trillion in operating profit for the quarter, down from KRW 2.4 trillion in Q3 2015.
Samsung issued a recall of the Note7 in September after complaints about exploding batteries. In October it stopped sales and production of the devices when replacement models were reported to have caught fire.
The company said, however, that smartphone shipments remained solid during the third quarter of the year due to continued stable sales of its existing flagship devices, including the Galaxy S7 and S7 edge, and steady growth in the mid-tier Galaxy A and J series.
Looking ahead to the fourth quarter, smartphone and tablet demand is forecast to increase during the year-end peak season.
The Consumer Electronics Division, including the Visual Display and Digital Appliances businesses, posted KRW 11.24 trillion in consolidated revenue and KRW 0.77 trillion in operating profit for the quarter, up from KRW 0.36 trillion.
Earnings for Samsung’s Visual Display business improved year on year led by expanded sales of premium products, such as SUHD and Curved TVs, despite global TV demand decreasing compared to the same period last year.
Samsung said it expects to maintain a solid performance in the fourth quarter by focusing on increasing sales of premium products, such as Quantum Dot SUHD TVs, and strengthening year-end promotional activities.