Samsung Q3 profits are down after Galaxy Note7 recall

Samsung has announced its financial results for Q3 2016 that ended September 30, 2016. As expected the South Korean tech giant's operating profit tumbled down more than 30 percent following the Galaxy Note7 fiasco. It made an operating profit of 5.2 trillion won ($4.5 billion).

The company reported revenues of 47.82 trillion won ($41.9 billion), down 7.5 percent year-on-year and net profit stood at 4.54 trillion won ($40 billion), down 16.8 percent, compared with 5.46 trillion for the same quarter last year.

The IT and mobile communication division posted 0.10 trillion won operating profit for the quarter, down 96 percent compared to 2.40 trillion won in the same quarter last year, mainly due to the Galaxy Note7 discontinuation, following reports of the devices catching fire. 

Despite decline in profits, smartphone shipments remained solid due to stable sales of existing flagships, the Galaxy S7 and Galaxy S7 edge, as well as steady growth in mid-tier Galaxy A and Galaxy J series.

Samsung said that it aims to achieve growth in its mobile business' operating profits in fourth quarter by continuing strong Galaxy S7 and Galaxy S7 edge sales, while maintaining profitability in the mid-to-low end segment through increased shipments of new models.

Samsung expects its smartphone/tablet demand to increase in Q4 2016 due to holiday season sales. Future plans are to launch new flagship smartphone in 2017 with "differentiated design and innovative features, as well as regaining consumers’ confidence." The company also has plans for expansion of Samsung Pay rollouts and cloud-related services as well as the introduction of artificial intelligence related offerings.

Source | Via