[THE INVESTOR] Samsung Electronics on Sept. 30 projected that the ongoing Galaxy Note 7 recall worldwide would cost Samsung Electronics a combined 2 trillion won (US$1.80 billion) in the coming months this year.
“We are adjusting our estimates of the third-quarter operating profit from 7.8 trillion won to 7 trillion won,” said the securities firm. “Following the Galaxy Note 7 recall, the costs will be 1.5 trillion won in the third quarter and 500 billion won in the fourth quarter.”
Despite the recall costs, the firm raised the company’s target stock price from 1.8 million won to 2 million won, citing possible shareholder-friendly policies that are expected to be announced in its third-quarter earnings report next month.
The company’s abundant cash reserves also raised expectations for the company’s stock price. As of the second half of this year, Samsung had a record 77 trillion won in cash that could be used for dividends or merger and acquisition deals.
