Samsung’s booming chip and display business was enough to offset the cost of having to recall its Galaxy Note 7 smartphones, according to a Q3 regulatory filing the South Korean tech company made today.
The company’s 7.8 trillion won ($7 billion) profit grew 5.6 percent by quarter to beat expectations. However, things might be a bit more complex than they initially appear.
As Reuters notes, Samsung discloses only overall estimates in its filing, and won’t have to release full results until late October. In the filing, there’s no comment about how much a Galaxy Note 7 recall will cost. Some brokerages have suggested it could cut into Samsung’s mobile profits by 1 trillion won or more.
While it obviously wouldn’t impact on July-September earnings, there has also been mounting speculation that Samsung may be looking at a recall for its replacement Note 7 handsets, after they exhibited the same problems as the ill-fated first generation handsets.
This week, a Southwest Airlines plane was evacuated when a Galaxy Note 7 began spewing grey-green smoke after its owner dropped it on the floor. It then proceeded to burn through the plane’s carpet.
While it’s certainly good to outperform earnings expectations, however, not everything about the filing is quite so rosy: revenue compared to this time last year declined by 5 percent.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
3 responses to “Even flaming Galaxy Note 7 can’t scorch Samsung profits”
Do I really have to say this again? I guess I do. Note7 sales aren’t included in this quarter. The damage won’t be known until next quarter.
Up until the point when all this exploding business happened, everything was normal. Now people actually know about it…
The quarter is “July-September earnings” Why would a phone that went on sale in August not be included in the July to September numbers?
Maybe I’m one of the few people who don’t hate Samsung as a whole company. I think they were despicable for basically cloning the iPhone and feel the same schadenfreude others do with the whole Note 7 fiasco, but there are various products I do like from Samsung, especially their high-def televisions. My home currently has Samsung TV’s, including one of the more recent 4k ones, and I’m quite happy with them. I’m not going to close off from buying Samsung products just because I disapprove of the practices of their handset division and am an iPhone advocate.
If Samsung does well overall, good for them. I do admit I would be happy to see their mobile division take a big hit, though. ;)