Samsung’s profit plummets 30% following the Galaxy Note 7 crisis

The struggle is real for Samsung. The Korean electronics giant’s operating profit plunged 30 percent year-on-year as the effects of the Galaxy Note 7 crisis begin to take a financial toll.

Samsung today announced a KRW 5.2 trillion ($4.6 billion) operating profit for the third quarter of 2016, that’s down one-third on the KRW 7.3 trillion that it posted this time last year. Revenue for the quarter came in at KRW 47.82 trillion ($42.03 billion), down 30 percent year-on-year also.
It specifically said that revenue for its IT and mobile business “declined due to the Galaxy Note7 discontinuation” — which, in case you have spent the last two months or so living under rock, was due to defective batteries which caused many customers’ phones to catch fire.

Samsung, which hopes to rekindle the Note brand next year, recognized that it needs to do a lot of brand building to get over this disastrous episode.
“Regarding the mobile business, the company will focus on expanding sales of new flagship products with differentiated design and innovative features, as well as regaining consumers’ confidence,” it said in a statement.