Samsung Electronic’s third quarter results are showing the effects of the Galaxy Note 7 recall. The company reported 5.2 trillion won (about RM19 billion) in operating profit; which represents a 30-percent drop from the year before.
Profits were maintained by the sale of components like SSDs and flexible OLED panels. Despite this, Samsung admits that income had decreased quarter-on-quarter due to a price correction on DRAM sales.
Samsung also blamed the strengthening value of the Korean Won for impacting profits. The company claims it lost about 700 billion won (RM2.5 billion) worth of foreign profits due to the exchange rate.
Naturally, Samsung addressed the issue with the Galaxy Note 7; although it believes that the impact is only in the short term. The manufacturer expects revenue to recover to early 2015 levels based on sales of the Galaxy S7 and S7 edge; and with the expansion of Samsung Pay to several new markets.
Fortunately, Samsung is not the only one who has been experiencing problems with the high end smartphone market. Rivals Apple also reported a decline in profit; the first since 2001. It is likely that the Note 7 problems appeared just as the global decline for premium smartphones slows; which had an unfortunate effect on Samsung’s earnings.
[Source: Samsung]
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