Samsung announced its financial stats for the third quarter of 2016 and, as previously estimated, their revenue and profit slightly decreased due to Galaxy Note7 battery issues.
The revenue for the third quarter was 47.82 trillion won (approx. $42 billion), a decrease of 3.87 trillion won (approx. $3.4 billion) compared to the same period last year, while the operational income was 5.2 trillion won (approx. $4.6 billion), a decrease of 2.19 trillion won (approx. $1.93 billion).
Samsung originally shipped 2.5 million Galaxy Note7s with battery issues. The first recall started in September 15 when the company started a replacement program. By September 27 the company announced:
- Around 90 percent of Galaxy Note7 users have been choosing a new Galaxy Note7 since products became widely available.
- More than 60 percent of all recalled Galaxy Note7 phones sold in the U.S. and Korea have been exchanged through the program.
- In Singapore, more than 80 percent of customers have participated in the exchange program, which started on September 17.
On October 11, Samsung has issued a statement that it’s ceasing sales of the phone worldwide while investigation takes places.
The analysts quoted by Reuters concluded that ceasing sales of Galaxy Note7, which was estimated to be sold in 19 million units, would equate to nearly $17 billion in lost revenue.
However, the company announced that while it’s expecting difficulties until the first quarter of 2017, it will strive to achieve, for the fourth quarter, comparable figures with the same period last year, based on the solid sales of the Galaxy S7, S7 Edge and steady growth of the Galaxy A and J series.
For the components businesses, Samsung announced that the operating profit increased compared with the previous quarter, but slightly decreased compared with the same period last year, while Consumer Electronics Division was boosted by premium products.
For the next year, Samsung anticipates a comeback with the launch of new smartphones and with the growth of cloud-related services or artificial intelligence.
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