The debacle of the Galaxy Note 7 will cost € 5 billion to Samsung – The Echoes

Samsung Electronics has communicated for the first time, this Friday, an evaluation of the cost of the removal of the Galaxy Note 7 on its future profits. It is estimated that the crisis will dampen its operating profit of 2.500 billion won (2 billion euros) in the fourth quarter of 2016 and will further reduce to 1,000 billion won ($ 799 million euros) in the first quarter of 2017. Earlier in the week, the south Korean group had already stated that the recall phablets running, potentially dangerous, had reduced its operating profit for the third quarter of 2,600 billion won (2.1 billion euros).

In total, Samsung Electronics, which has integrated in its calculation of the invoice related to the removal of millions of devices already sold or products as well as the shortfall of lost sales, estimated, therefore, that this industrial accident to him, “will cost” close to 4.9 billion euros. A sum which represents the equivalent of half the profits of business generated, in 2015, by the mobile division of the company.

Report to other products

The communication of this estimate will clarify the debate on the financial impact of the fiasco, which animates the analysts since the beginning of the week. In some notes, economists had pointed to a crisis in the ” $ 17 billion “, the semblance estimate that buyers in the past or potential of the Galaxy Note 7 would completely move away from Samsung products. The majority of analysts had a reading less dark, explaining that a large portion of the customers would look elsewhere on other gear high-end brand. A thesis which seems to be validated by Samsung Electronics, deemed to be reasonable in their financial projections.

Hoping to quickly turn the page on this scandal which undermines its brand image, Samsung Electronics explained on Friday, in a press release in the stock market, that he wanted to ” standardize its mobile activities in increasing the sales of flagship models, like the Galaxy S7 and the Galaxy S7 Edge “.

investors seem to be satisfied with these explanations. The mid-day, the title of Samsung Electronics grew by 1.15% in the square of Seoul, after having already recorded a nice rise on Thursday.