Samsung has issued its second profit warning of the week in the wake of the exploding Galaxy Note 7 saga, increasing the expected profit losses to approximately $5 billion.
The outlook sees Samsung staring down the barrel of $5.3 billion in total losses, after it said on Wednesday it would suffer a $2.3 billion hit to third-quarter profit.
The South Korean company has had a disastrous year after its flagship device was released in August, with some units suffering from a technical fault that, in some cases, caused the phone to overheat, emit smoke or catch fire. Samsung was forced to recall every single device, numbering in the millions worldwide, and issue replacements. However, there were numerous cases of replacement units also catching fire, forcing the company to cease production permanently.
To make matters worse, Samsung still can’t pinpoint the exact cause of the problem, and analysts predict the fiasco will cost them a lot more than they are currently predicting, with estimates ranging from $10bn to $20bn.
“The company already allocated the expected direct cost from the discontinuation of Galaxy Note7 sales in its third quarter earnings guidance revision announced on October 11, but expects the drop in revenue from the discontinued sales to continue to have a negative impact on operating profit for the next two quarters,” reads Samsung’s statement. “The negative impact is estimated in the mid-2 trillion won range for the fourth quarter of 2016 and at approximately 1 trillion won for the first quarter of 2017.”
Meanwhile, Apple execs are rubbing their hands with glee. You can find out all you need to know its premier device, the Apple iPhone 7, here.