The company said the revision reflected the expected impact on sales and earnings of its decision on Tuesday to permanently discontinue production of the Note 7. Song Myung-Sup, an analyst at Hi Investment & Securities, said the impact would be felt for many quarters to come.
“Given that it needs to spend more on research, development, inspection and marketing down the road, this crisis will affect its earnings until late 2017,” he added.
The company also slashed its third-quarter sales estimate by four percent to 47 trillion won from 49 trillion won.
The announcement came after the close of trade Wednesday which saw Samsung’s share price fall 0.7 percent, following an 8.0 percent plunge the day before.
Wednesday’s revision would reflect a 30-percent drop in Samsung’s quarterly operating profit from a year ago, compared to a 5.5-percent rise according to the earlier estimate.
Samsung announced a recall of 2.5 million units of the oversized Galaxy Note 7 smartphone in early September after several devices exploded or caught fire.
When replacement phones also started to combust, the company eventually decided to scrap the Note 7 line entirely.
The company blamed faulty batteries made by an unnamed supplier — widely believed to be its sister company Samsung SDI.
