Wednesday, 12 October 2016

Samsung estimated to lose 2,300 billion profit in Q3 by the crisis in Note 7

Samsung estimated to lose 2,300 billion profit in Q3 by the crisis in Note 7

When yesterday we talked about the cost that would have for Samsung withdrawal from the market of Note 7, we explained that there was still no official estimates by the brand. Well, the Korean company today issued a statement in which updates its estimates of revenue and profit for the fiscal third quarter. The new figures are nothing positive for them: a difference of nearly 2,500 million dollars in profits from what they expected.

Specifically, talking about numbers, Samsung estimated to have sales revenue of approximately 44.000 billion, but revised after the announcement of the withdrawal of Note 7 yesterday figures reduce this amount to almost 42,000 million ( 2,000 million difference). In terms of operating profits, forecasts of Samsung spend nearly 7.000 million to just over 4,633 million, some 2,300 million dollars difference that the company will stop win (one third of the expected benefits) by the crisis in Note 7.
In addition to the cost of the recall (mailings, incentives, etc.) and income lost by terminals that will stop selling, an analyst at HMC Investment Securities Co. interviewed by Bloomberg claims that Samsung has also reflected the lost money in the purchase of components to make the Note 7 and that, with stop manufacturing, you will no longer use.

The same analyst highlights how the disaster Note 7 carried forward almost all expected benefits for the mobile division of Samsung this quarter: analysts expected them an operating profit of 2,400 million dollars, but calculated that, with the new update from Samsung, the benefits will not exceed 267 million. Here we are talking about estimates of others, since Samsung is not broken down by categories in their own estimates.

And in future quarters?
Note that we are talking about the estimates for the third quarter : in the Note 7 successive quarters will remain in effect and reduce expectations of Samsung in terms of sales and profits referred to by the units will stop selling. According to analysts Reuters consulted yesterday , the final figure among losses by the recall and lost sales over the life of the Note 7 could approach 17,000 million.

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