14 DAY TRIAL // Samsung is one of the biggest smartphone makers in the world, but the company recently suffered a blow with the recall of its latest flagship smartphone, the Galaxy Note 7. The South Korean firm has recently posted its Q3 earnings and it seems that the recall procedure didn’t have a major financial impact on its proceeds.
Samsung’s earnings guidance for the third quarter of 2016 shows that the consolidated sales are expected to reach about $44 billion, while operating profits may record $7 billion compared to an estimated $66.6 billion.
It seems that the Galaxy Note 7 didn’t have a major impact on the company’s earnings for the third quarter of this year. But Samsung isn’t producing just smartphones; it also manufactures chips and displays. Samsung’s other divisions helped soften the blow and the company managed to report an increase of 5.6% in its operating profits.
Samsung will release full financial results this month
Samsung is expected to release full results later this month, but this particular earnings guidance does show that the company managed to significantly reduce the impact that the Galaxy Note 7 might have had on its financial situation.
However, Samsung has just recently restarted sales of the Galaxy Note 7 in certain countries and the recall procedure isn’t quite completed. This means that its financial results might still be affected by the Note 7 in Q4.
It remains to be seen how Samsung will be handling the whole Galaxy Note 7 saga, considering that a replaced smartphone caught fire in an airplane a few days ago and UK’s Royal Mail is said to stop shipping Samsung Galaxy Note 7 units for fear of incidents.
And that’s not all, as the phone maker might start a new recall for the Galaxy Note 7, seeing how reports of replaced units catching fire have started to surface. When it comes to financial results, Samsung seems to be handling the situation quite well, but the company’s image might not be as easy to repair.