Samsung Electronics Co yesterday slashed its third-quarter profit estimate by 33.3 percent, citing fallout from the recall nightmare surrounding its scrapped Galaxy Note 7 smartphone.
The South Korean electronics giant filed a revised operating profit estimate of 5.2 trillion won (US$4.6 billion), compared with the 7.8 trillion won it announced just last week.
The company also slashed its third-quarter sales estimate by 4 percent to 47 trillion won from 49 trillion won. The announcement came after the close of trading on the South Korean stock exchange during which Samsung’s share price fell 0.65 percent, following an 8 percent plunge the day before.
The revised earnings estimate came after the firm announced on Tuesday it was scrapping production of the Note 7, halting future global sales and advising all customers to cease using the device immediately.
The revision would reflect a 30 percent drop in Samsung’s third-quarter operating profit from a year ago, compared with a 5.5 percent rise under the earlier estimate.
Samsung announced a recall of 2.5 million units of the oversized Galaxy Note 7 smartphone early last month after several devices exploded or caught fire.
When replacement phones also started to combust, it decided to scrap the Note 7 line entirely.
The company said that it was sending fire-resistant packages to its customers in the US as a precaution against possible fires or explosions from Note 7s they return to retailers.
Samsung said packaging meets US regulations required for shipping lithium-ion batteries or devices containing them.
A video on YouTube dated Tuesday shows a man it says is at the XDA Developers office in the US, unpacking a kit containing a static shield bag, thermally insulated box, gloves and instructions for ground shipping only.
Additional reporting by AP
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