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October 7, 2016

Samsung shrugs off exploding smartphones with Q3 profit jump

Smartphone maker expects Q3 sales of around $44bn.

By CBR Staff Writer

Samsung Electronicsearnings guidance for the third quarter of this year shows that the electronics manufacturer remains strong despite the global recall of Galaxy Note 7 smartphones.

The company expects to post an operating profit of nearly $7bn, on sales of around $44bn. The net income and divisional figures will be released when Samsung discloses its earnings later this month.

Galaxy Note 7

A passenger’s Galaxy Note 7 phone reportedly started smoking just before takeoff on a Southwest Airlines flight from Louisville to Baltimore.

Samsung suspended sales of its Galaxy Note 7 last month after a battery issue caused the devices to catch on fire.

The company replaced 60% of recalled phones sold in the US and Korea with new devices. The company’s stronger-than-expected Q3 likely comes from strong performances of the company’s semiconductor, display, and consumer electronics division. The gains in these divisions will likely offset the heavy costs incurred by the Note 7 recall.

Earlier this year, two separate reports revealed that Samsung had extended its lead in the global smartphone market over Apple in the second quarter of this year, due to better-than-expected Galaxy S7 sales.

According to International Data Corporation, Samsung delivered 77 million smartphones in Q2, up 5.5% from a year ago, for a market share of 22.4%. This was compared with a 15% decline in sales for Apple’s iPhones.

A separate survey by Strategy Analytics had a similar estimate, with Samsung taking the lead with a 22.8% market share.

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