Samsung Note 7 recall to cost at least $5.3 billion
SEOUL, Korea, Republic Of — Samsung Electronics said Friday that the discontinuation of the Galaxy Note 7 would cost the company about $3 billion during the current and next quarters, bringing the total cost of the recall to at least $5.3 billion.
The Note 7 discontinuation will cost in the mid-2 trillion won range during the October-December period and another 1 trillion won ($884 million) during the January-March quarter, the company said in a statement.
Samsung already slashed its third-quarter profit forecast by $2.6 billion earlier this week, an amount that could wipe out its entire mobile business profit. That did not include the cost of Samsung’s first recall, which analysts estimated at 1 trillion won to 2 trillion won.
Samsung has enough cash and other businesses to absorb the shock from the phone recall. It said it expected to generate 5.2 trillion won ($4.6 billion) in operating income during the third quarter after the recall cost. Analysts said most of the income will be generated by sales of advanced displays and semiconductors.