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Oh dear kids, Samsung's Q3 financial results are in and it is not pretty at all. Following the much-reported "explosiongate" fiasco with the Galaxy Note 7 being recalled twice, and then discontinued, Samsung's operating profit for its mobile division has taken a complete nosedive, to the tune of a 95% crash. Operating profit for the quarter is $87.8 million, down 95% from the same quarter in 2015 and the firm's lowest operating profit quarter in the last eight years.
Samsung's total operating profit including all other sectors of its businesses (TVs, appliances, etc.) is $4.5 billion for the quarter, down $1.9 billion from Q3 2015 and the lowest profit quarter in the last two years. In a statement made with the reveal of the Q3 results, Samsung made no bones about the fact that the Galaxy Note 7 debacle is the cause of this signfiicant financial loss.
"The Mobile business saw its earnings decrease significantly QOQ due to the effects of the discontinuation of the Galaxy Note7. However, smartphone shipments remained solid due to continued stable sales of its existing flagship devices, including the Galaxy S7 and S7 edge, and steady growth in the mid-tier Galaxy A and J series."
The firm said it is still hopeful that peak sales of devices such as the Galaxy S7 series in the often profitable Q4 will help it to hit comparable year-on-year figures to 2015. In other words it is hoping at best to break even. However, Samsung is optimisitc about next year.
"As for 2017, the company anticipates a turnaround with the launch of new flagship smartphones," it said.
Samsung officially discontinued the Galaxy Note 7 after replacement "safe" units following the first recall and replacement scheme also began exploding.
The first major incident after the first recall happened during boarding on a Southwest Flight 994 to Baltimore at Louisville International Airport on Wednesday. This wasn’t an old model either; no this was a brand new, reissue model deemed safe by Samsung. The plane was evacuated after the cabin filled with smoke, thank god it happened before flight.
The US Consumer Product Safety Commission chairman Elliot F. Kaye has released an official statement about the incident.
“CPSC is moving expeditiously to investigate this incident. Thankfully, reports indicate that all of the passengers were able to make it off the plane without harm. Agency staff has already reached out to the FAA and Samsung to gather the facts about the incident. Agency staff will also reach out to the consumer who experienced a serious incident with his phone. I want to reiterate my call for consumers who have the recalled Galaxy Note 7 to keep their smartphones powered down and to immediately take advantage of the remedies being offered by Samsung. Consumers should know that one of the remedies is a refund.”