'Impact' From Note7 Fiasco Forces Samsung to Cut Q3 Profit Forecast By 1/3

Samsung slashed its Q3 operating profit forecast by a third to cover the "impact" of recalling and scrapping the Galaxy Note7, the company said in a Wednesday announcement. "After recent incidents and in consideration of our consumers’ safety," Samsung "stopped sales, exchanges and production" of the troubled smartphone (see 1610110042), the company said. Samsung now expects to report a Q3 operating profit of 5.2 trillion Korean won ($4.6 billion), a 33 percent downgrade from the forecast of 7.8 trillion won ($7 billion) in Q3 operating profit from only a few days earlier (see 1610070038), the company said. The downgrade "reflects the impact" on Q3 earnings of the decision to scrap the Note7, Samsung said. It also converted the previously expected 5 percent rise in operating profit from Q3 a year earlier into an expected 30 percent decline, the company said. Samsung scheduled the release of Q3 results for Oct. 27.