Samsung’s mobile division profits collapse by 96% year-over-year

Cyrus Farivar
Neilson Barnard / Getty Images
Less than a month after Samsung recalled all 2.5 million Galaxy Note 7 handsets—including the replacements—the Korean mobile giant announced that it had sustained a notable financial hit during Q3 2016.
According to quarterly earnings released Thursday morning in Seoul, the company’s total quarterly net profit fell 16.8 percent to ₩4.54 trillion Korean ($4.0 billion).
As a result of the failed Galaxy Note 7, the IT and Mobile division’s profit collapsed nearly entirely, hitting just ₩100 billion ($88 million). By comparison, during the third quarter of 2015, that division’s profit was ₩2.40 trillion, or $2.1 billion. That dip in the mobile division was the worst performance in the six years since the Samsung Galaxy first debuted.
“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,” the company wrote in a statement. “Samsung will concentrate on strengthening its competitiveness by continuously enhancing solution capabilities such as KNOX, Samsung Pay and cloud-related and artificial intelligence-related services.”
Year-over-year overall operating profit was down 30 percent, from ₩7.4 trillion ($6.5 billion) to ₩5.2 trillion ($4.5 billion).
"However, smartphone shipments remained solid due to continued stable sales of its existing flagship devices, including the Galaxy S7 and S7 edge, and steady growth in the mid-tier Galaxy A and J series," Samsung added. "Looking ahead to the fourth quarter, smartphone and tablet demand is forecast to increase during the year-end peak season."

Samsung’s mobile division profits collapse by 96% year-over-year Reviewed by Bizpodia on 22:30 Rating: 5

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