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Samsung's profit plunges over Note 7 fiasco, overhaul on the cards

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  28 Oct 2016 12:00 AM GMT

Seoul, Oct 27: South Korean tech giant Samsung Electronics’ net profits in the third quarter dropped by a massive 16.8 per cent, primarily due to the Galaxy Note 7 discontinuation, the company announced on Thursday as the shareholders approved the nomition of Vice Chairman Lee Jae-yong to the electronics giant’s board of directors. According to Yonhap news agency, top market cap Samsung Electronics rose 0.38 percent to end at 1,573,000 won after the nomition news, siglling that the only son of the ailing Chairman Lee Kun-hee will more actively participate and take formal responsibility in the company’s important decision-making.

Earlier in the day, the company announced that operating profit dropped 29.7 per cent from a year earlier to 5.2 trillion won ($4.6 billion) in the July-September quarter. From three months ago, the profit tumbled 36.2 per cent. It marked the lowest in two years, meeting the revised estimate by Samsung which slashed its prelimiry forecast by 2.6 trillion won to reflect costs from the discontinuation of its fire-prone smartphone.

“We know we must work hard to earn back your trust and we are committed to doing just that,” co-chief executive JK Shin was quoted as saying in media reports after the results were announced. Scores of reports about Note 7 phones heating up and catching fire led Samsung to termite its latest flagship model. Hundreds of owners of the device here have sued Samsung for inconvenience they experienced in the recall and termition process. (IANS)

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