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jeudi 27 octobre 2016

The Note 7 wiped out Samsung mobile’s profit in Q3

Samsung Galaxy Note 7 (Notetaking)-21 (leaning against wall with s pen front colorfy app)

Samsung Electronics announced its financial results for Q3 2016 and they are just as lousy as anticipated.

What should've been a bonanza turned into famine, as Samsung's mobile division struggled to contain the fallout caused by the Note 7 cancellation. Samsung barely avoided recording a loss in its IT & Mobile unit, posting 100 billion won ($87 million) in operating profit.

That seems like a lot of money, until you look at the same figure in previous quarters. Samsung Mobile made 4.32 trillion won in Q2 and 3.89 trillion won in Q1. Year on year, Q3 brought a 95% drop.

samsung-profit-quarter-q3-2016

Fortunately for Samsung, its other units fared much better, which allowed it to post 5.2 trillion won ($4.5 billion) in overall operating profit. That's a big drop compared to previous quarters, but still far from a catastrophe. The component and display businesses in particular did very well.

samsung-q3-earnings

The Note 7 fallout will extend in the next quarter, but Samsung says it "will strive to achieve comparable YOY earnings." The Galaxy S7 and Galaxy S7 Edge, as well as new models in the mid to low-end segment are expected to drive Samsung's profit in Q4.

Samsung said it anticipates a turnaround next year thanks to the launch of new flagships. The company has already teased the Galaxy S8 and Galaxy Note 8, promising it would make them available at reduced prices to Note 7 users who choose to remain loyal to Samsung.

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. 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.

Samsung also said it's taking steps to avoid another Note 7-style fiasco:

Going forward, the Company will make significant changes in the quality assurance processes in its commitment to providing safe and reliable products and regaining customers' confidence.

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