SEOUL, Oct. 27 (Korea Bizwire) – Samsung Electronics Co. said Thursday its third-quarter operating profit slipped 29.6 percent from a year earlier, mainly hit by the discontinuation of the Galaxy Note 7 smartphone over safety concerns.
The world’s largest maker of smartphones said its operating profit for the July-September quarter stood at 5.2 trillion won (US$4.6 billion), compared with a profit of 7.3 trillion won a year ago.
Compared with a quarter earlier, Samsung’s operating profit plunged 36.1 percent.
Revenue for the third quarter fell 7.4 percent from a year earlier to 47.8 trillion won, Samsung said in a regulatory filing.
Samsung was forced to permanently halt the production of the Note 7 earlier this year after a number of reports at home and abroad that some of the devices caught fire while charging.
The third-quarter operating profit matched Samsung’s earlier earnings guidance, which took into account financial losses over the Note 7.
Also on Thursday, Samsung said it will update its software to prevent batteries of the Note 7 in South Korea from charging beyond 60 percent.
Despite the Note 7 fallout, Samsung said in a statement that, “Smartphone shipments remained solid due to continued stable sales of its existing flagship devices, including the Galaxy S7 and S7 Edge.”
As for 2017, the company said it anticipates a turnaround with the launch of new flagship smartphones.
Hit by the discontinuation of the Note 7, Samsung’s IT and mobile division managed to post an operating profit of only 100 billion won in the July-September quarter.
Samsung, which is also the world’s largest maker of memory chips, saw its semiconductor business report an operating profit of 3.37 trillion won for the quarter.
“In the fourth quarter, strong demand for NAND is expected to continue thanks to the expanded adoption of SSD in all segments and the growing need for high-density chips for mobile devices,” Samsung said.
“Market conditions for DRAM will remain stable, as mobile DRAM demand is expected to be solid due to new smartphone launches and increased shipments of high-density memory chips,” Samsung said.
Shares of Samsung Electronics fell 0.45 percent to 1,560,000 won in early Thursday trading, underperforming the broad KOSPI’s 0.22 percent rise.