Samsung vowed to regain the trust of its customers and get its mobile business “back on track”, as it saw operating profit for the unit drop 96 per cent following the company’s Galaxy Note 7 embarrassment.
Samsung, disclosing financials for the first time since it was forced to discontinue the device two months after launch, said its IT & Mobile Communications profit slumped to KRW100 billion ($87.63 million), down from KRW2.4 trillion a year ago.
Revenue for the unit, meanwhile, stood at KRW22.54 trillion, a slight decrease from KRW26.61 trillion, as the company shipped approximately 89 million units during the quarter.
Samsung talked up strong sales of existing models, including the Galaxy S7 and S7 Edge. However, there was no hiding the effects of the Note 7 debacle, which caused it to report its lowest group profit since 2008, said Reuters.
In the company’s earnings call, KyeongTae Lee, VP mobile communications business, put recovery at the forefront of his message, but warned the effects of the Note 7 issue could linger until Q1 2017.
“Market demand for both smartphone and tablets is expected to increase quarter on quarter, as we enter the peak end of year season, he said. “We will also push to achieve similar earnings for the next quarter that we achieved in the previous year, focusing on sales of the Galaxy S7 and S7 Edge, which have shown continuous demand and stable profitability.”
As part of its recovery efforts, Lee said it would aim to increase shipments with the launch of new models in the mid-to-low end, expand Samsung Pay, ramp up on AI, and “achieve a full business turnaround with the release of a new flagship smartphone”.
“With these efforts, we will do our best to regain trust from our customers and get our business back on track as soon as possible,” he said.
For its networks business, the company saw profit improve due to expanding LTE coverage in the emerging markets.
At group level, the company reported an operating profit of KRW5.2 trillion, down from KRW7.39 trillion in Q3 2015, in line with a forecast it released earlier this month. This was on sales of KRW47.82 trillion, down from KRW51.69 trillion.
It said its consumer electronics business was boosted by the sale of premium products, led by sales of UHD and curved TVs, “despite global TV demand decreasing compared to the same period last year”.