Samsung slashes profit forecast by a third following Galaxy Note 7 debacle

Samsung issued earnings guidance last week that suggested the calamitous Galaxy Note 7 recall wouldn’t have a major impact on the company’s bottom line, but the company just released a statement adjusting its forecast significantly. Operating profit for the third quarter of 2016 is now estimated to come in at 5.2 trillion won ($4.6 billion), down 33 percent from the previous figure, while revenue expectations have been slashed by 2 trillion won to 47 trillion ($41.8 billion).

Earnings of 5.2 trillion won would represent the first year-on-year profit decline for Samsung in a year. The company made 7.39 trillion won in Q3 2015, which was a return to profit growth after two years of decline; the company is now predicting a 30 percent drop on that figure. Last quarter Samsung reported its best profits in over two years on the back of strong Galaxy S7 sales; Samsung hasn’t provided details on the adjusted forecast, but it’s clear that the company’s momentum has seriously slowed.