SEOUL, Oct. 14 (UPI) — Samsung Electronics said Friday it expects a $3.1 billion loss of operating profit in the next six months, a result of pulling its Galaxy Note 7 smartphone from the market.
The news comes after Wednesday’s announcement its third quarter profit fell by $2.3 billion.
The total $5.4 billion hit to Samsung’s bottom line prompted analyst Nomura Securities to predict Samsung will lose $9.5 billion in sales. Company stock declined 8 percent since the start of the week, after Samsung announced its troubled Galaxy Note 7 will end production and be pulled from the market.
The premium smartphone, launched in August, was meant to compete with Apple’s iPhone, but reports of overheating and exploding batteries led to recalls of 2.5 million devices and replacement of the batteries. Despite Samsung’s insistence that improvements made the phones safe, reports persisted that even the improved phones were spontaneously catching fire.
The decision to end production of its flagship product was a means of saving Samsung’s brand image, and protecting its other smartphones from the controversy.
The company is now offering $100 incentives to trade in Galaxy Note 7 phones for other Samsung products.