Samsung expecting $3bn loss over Note 7 woes

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Samsung expecting $3bn loss over Note 7 woes

Slashes quarterly profit estimate by a third.

Samsung has cut its third-quarter profit estimate by a third to take into account the 2.6 trillion won (A$3 billion) it will lose after deciding to recall and stop producing its fire-prone flagship Galaxy Note 7.

The South Korean company today revealed its preliminary third-quarter earnings, slashing operating profit for its third quarter to 5.2 trillion won. 

Just last week it had estimated it would bring in 7.8 trillion won in profit. It has also cut its sales estimate by 2 trillion won to 47 trillion won.

Its revised profit represents a 30 percent decrease on the same quarter last year.

The company said it had been forced to revise its estimated profit following its decision to end production of the Galaxy Note 7.

It had first announced a recall of the troubled device in early September following reports that the smartphones were overheating and catching fire. At the time it said it would recall 2.5 million devices due to a faulty battery issue.

But after ordering new batteries and shipping out replacement devices, the issues remained. Reports began emerging earlier this month about the same overheating issues affecting replacement Note 7s.

The problems forced Samsung to this week halt production of its flagship smartphone and ask its partners to stop selling and exchanging the devices.

It also told phone users to power down their devices and stop using them.

Australia's top three mobile telcos had already suspended sales or exchanges of Note 7s, and major airlines have banned passengers from using the phones on planes.

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