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Samsung Electronics' earnings expected to rebound in Q4

Sept. 27, 2016 - 11:10 By 임정요

The global recall of the Galaxy Note 7 smartphones may cut Samsung Electronics' projected third-quarter operating profit by over 5 percent, but the global giant's earnings are expected to rebound in the fourth quarter, industry analysts said on Tuesday.

A survey by financial information provider FnGuide showed that Samsung is expected to post an operating profit of 7.67 trillion won ($6.89 billion) for the third-quarter of this year, a fall of 5.3 percent from a pre-recall forecast. Before Samsung announced the global recall of the Note 7s earlier this month, the average consensus for Samsung's third-quarter operating profit was 8.1 trillion won.

The survey showed that Samsung is expected to post a third-quarter net profit of 5.8 trillion won, compared with 6.2 trillion won surveyed before the recall.

But some analysts expected Samsung's profits to rebound in the fourth quarter.

Kwon Sung-ryul, an analyst with Dongbu Securities, said the recall is painful for Samsung, but the company is likely to report a rebound in fourth-quarter profits, helped by strong sales of semiconductors.

Samsung started selling the Note 7 in South Korea on Aug. 19, but halted sales and conducted a global recall of 2.5 million units earlier this month following reports of some of the devices catching fire while being charged.

Analysts expected the recall to cost about 1 trillion won.

On Sunday, Samsung announced that it was postponing the start of new Galaxy Note 7 smartphone sales in South Korea by three days to Thursday.

The delay came after Samsung is seeking to swiftly complete the ongoing recall in South Korea.

Starting in South Korea, Samsung is expected to begin sales of the new Note 7s in the United States, Australia and other countries. (Yonhap)