Samsung slashes Q3 2016 profit estimates following Note 7 discontinuation

posted by Milen Y. / Oct 12, 2016, 6:30 AM

Samsung slashes Q3 2016 profit estimates following Note 7 discontinuation

After projecting a 5% year-over-year increase in its Q3 2016 operative earnings last week, Samsung has now revised its forecast following the global recall and discontinuation of its problematic Galaxy Note 7 phablet. The Korean tech giant has slashed its quarterly profit estimate by a third, bringing projected operating profits to $4.7 billion, down from the initial estimates of close to $7 billion. Samsung also cut its Q3 2016 revenue estimate from $43.5 billion down to $41.7 billion.

The company's revised earnings guide represents a 29.63 percent decline in operating profit, compared to Q3 2015, and a 36.12 percent decline from Q2 2016. Marketing experts are now suggesting that Q4 could also bring additional negative impacts on Samsung's profits, but they likely won't be as large as those from Q3:

"I think it's possible for fourth-quarter profits to come in as much as the high 7 trillion won [$6.2 billion] range,” Park Jung-hoon, a fund manager at HDC Asset Management, told Reuters.

Following two recalls of a total of 2.5 million Note 7 units, and the news for the smartphone's discontinuation, Samsung shares plummeted 10 percent this week, experiencing a further 0.7 percent drop Wednesday morning.

The global recall of Samsung's latest phablet was triggered by dozens of reports of units catching fire or exploding. The reasons for so many devices malfunctioning are still unclear, but Samsung is reportedly investigating the matter.

source: Samsung via Reuters

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27 Comments

1. uzimafioso

Posts: 469; Member since: Jul 15, 2014

Samsung handled this whole thing wrong. They shouldn't have chickened out. Maybe this will eventually be the first step towards the downfall of Samsung Mobile.

posted on Oct 12, 2016, 6:33 AM 3

15. sissy246

Posts: 7065; Member since: Mar 04, 2015

Keep dreaming. They make to many other phones . If this would have been apple it would have been the end because the only make 2 phones a year. So no won't be the end just a big hiccup.

posted on Oct 12, 2016, 8:16 AM 5

20. kiko007

Posts: 7493; Member since: Feb 17, 2016

Apple has 17x the cash of Samsung in off shore holdings. Samsung makes the majority of its profit off their mobile division, same as Apple. This is gonna hurt Sissy....hurt for a while.

posted on Oct 12, 2016, 9:24 AM 2

27. yoghibawono

Posts: 240; Member since: May 04, 2016

I dont own any Samsung but trust me; Vast majority of people (not including Samsung fanboys/girls) they still buy Samsung. casual customers only care when the product is branded. Samsung is waaay to big to "be killed" outside US. This news actually doesnt make that much of impact outside US. besides it is Galaxy S7 smartphone sales propelled mobile earnings not the Note series.

posted on Oct 13, 2016, 2:47 AM 0

2. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

Sammy fans who keep the note 7 will not helping Samsung, they are destroying Samsung reputation, more and more explosion coming and will hurt Samsung sales in the future. Surrender yourself, return your device, and get Oneplus 3

posted on Oct 12, 2016, 6:38 AM 7

3. Ninetysix

Posts: 2962; Member since: Oct 08, 2012

Can't fix stupid broski.

posted on Oct 12, 2016, 6:40 AM 7

6. Plasticsh1t

Posts: 3097; Member since: Sep 01, 2014

Preach.

posted on Oct 12, 2016, 7:03 AM 0

12. NexusX

Posts: 613; Member since: May 16, 2013

The fact that Samsung hired lil Wayne to endorse their product should tell you who Samsungs target audiences are: people who like shiny gadgets and gimmicks

posted on Oct 12, 2016, 7:36 AM 2

21. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

Because only black people like shiny gadgets with gimmicks?! So then who is Apple's target audience? Yuppies, gays, lesbians, homophones, racists and more. After all, these are the type of people we see holding iPhone and endorsing them. Right? What message does that send?

posted on Oct 12, 2016, 9:47 AM 1

24. NexusX

who said anything about black people? geeez. i thought it was universally acknowledged that lil wayne was dumb and had questionable taste

posted on Oct 12, 2016, 1:20 PM 1

14. NoToFanboys

Posts: 3231; Member since: Oct 03, 2015

True, no fixin' those blind fanboys. Same goes for you too sadly.

posted on Oct 12, 2016, 7:54 AM 1

4. trojan_horse

Posts: 5868; Member since: May 06, 2016

OnePlus 3 would be the last phone I'll consider, if I ever happen to give up on the Note7. Note5 is the only logical substitute for my Note7, and after the Note5, there's still LG V20 and Google Pixel XL, before even talking about OnePlus 3.

posted on Oct 12, 2016, 6:48 AM 5

11. NexusX

Feel free to keep your $800 ticking time bomb, just don't bring it with you to the train or airplane unless you want to be the asshole who delays everyones commute with a smoking phone.

posted on Oct 12, 2016, 7:30 AM 5

25. acruzlu unregistered

Same here. I would settle for the v20 if it comes to it and maybe the s7 edge. The pros of the note 7 outweigh the cons. I can have my phone start my work day at 100% and end around 80-90%

posted on Oct 12, 2016, 4:30 PM 0

5. Fona13A unregistered

Well it seems like something PhoneArena hyped for, right? I mean yeah this definitely falls on Samsung, its just cute how the kids who run this playground (staff) are low key bragging about this s**t lol. You guys are a class act. Really now.

posted on Oct 12, 2016, 7:02 AM 0

13. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

It's not just the Note 7 debacle that is hurting them if their earnings are down 34% from projected. The S7 and S7E must have fallen off a sales cliff, because the Note 7 wasn't selling that briskly.

posted on Oct 12, 2016, 7:36 AM 0

16. davthom123

Posts: 120; Member since: Mar 02, 2015

best time for lg to push the v20 hard.plus it wouldn't be bad if the the next note(if there is a next one) using lg style removable batteries,I mean lg has proved u don't need to sacrifice removable batteries for design