Samsung lowers profit forecast by 33pc over Note 7 fiasco

After announcing game over for Galaxy Note 7 yesterday, Samsung has issued a revised earnings forecast for Q3 2016.

In its last week earnings’ guidance, the South Korean giant suggested that Note 7 recall wouldn’t have a major impact on the company's bottom line but seems like its otherwise now.

Samsung estimated that its sales from July – September amounted to around 49 trillion Korean won ($43.6 billion), with operating profits weighing in at 7.8 trillion Korean won ($6.9 billion approx). However, the operating profit is now estimated to come in at 5.2 trillion won ($4.6 billion), down 33 percent from the previous figure, while revenue expectations have been slashed by 2 trillion won to 47 trillion ($41.8 billion).

“After recent incidents and in consideration of our consumers’ safety, Samsung Electronics stopped sales, exchanges, and production of the Galaxy Note7. Below is a revised pre-earnings guidance which reflects the impact of this decision on the third quarter earnings, in accordance with accounting standards. We are providing the revised guidance based on disclosure regulations of the securities market,” said the company in the official post.

Earnings of 5.2 trillion won would represent the first year-on-year profit decline for Samsung in a year. Last quarter Samsung reported its best profits in over two years on the back of strong Galaxy S7 sales; Samsung hasn't provided details on the adjusted forecast but looks like the company is reeling under a severe blow.