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Samsung expects United States dollars 3 billion loss over Note 7 recall

A woman walks by an advertisement of the Samsung Electronics Galaxy S7 Edge and S7 smartphone in Seoul, South Korea, Friday, Oct. 14, 2016.

Samsung's share price was up 1.3 percent by the close of trading after opening in negative territory, down 0.4 per cent. S.R. Kwon, an analyst at Dongbu Securities, said Samsung's loss forecast was largely aimed at muting speculation about just how bad the profit downturn was likely to be.

The fiasco of Samsung's fire-prone Galaxy Note 7 smartphones - and its stumbling response to the problem - has left consumers from Shanghai to NY reconsidering how they feel about the South Korean tech giant and.

A Xinhua report also said the company has seen its estimated losses from discontinuing Galaxy Note 7 smartphones amounted to as much as 7 trillion won (6.2 billion USA dollars) in consideration of direct and future costs.

In its Friday statement, Samsung said that the blow to the company's profit in the October-December 2016 quarter will probably be in the mid-2 trillion, and approximately 1 trillion won ($900 million) for the January-March 2017 quarter.

Soh Hyun-cheol, an analyst at Shinhan Investment Corp. estimated Samsung's internet and mobile division's operating profit at 1.7 trillion won, projecting smartphone sales would drop 12.6 percent year-on-year to 72 million units in the fourth quarter.

Samsung faced a severe setback this year with the entire Note 7 fiasco, becoming one of the biggest recalls and failures in the history of tech.

Samsung has enough cash and other businesses to absorb the shock from the phone recall.

The company vowed to focus on overhauling its internal process for product quality control to strengthen product safety and provide safe products. It did not elaborate.

The firm said that in order to "normalise its mobile business", it would expand sales of its other flagship devices, such as the Galaxy S7 and S7 Edge.

Samsung said on Thursday it is offering up to $100 in bill credit to consumers who exchange their Note 7s for any Samsung smartphone in the United States.

Earlier, ratings agency Fitch Ratings had said that the Galaxy Note 7 debacle could cost Samsung Electronics Corporation (SEC) in terms of its overall credit profile though the financial impact won't be lower.


Source: Samsung expects United States dollars 3 billion loss over Note 7 recall

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