The Galaxy Note 7 disaster that has befallen Samsung has forced the firm to slash profit expectations by a third for the current quarter.
The firm has put out revised profit guidance saying that the Galaxy Note 7 recall and production halt will result in a 33 per cent lower profit than it had first predicted at ₩5.2tn ($4.6bn), down from the expected ₩7.8tn ($5.6bn).
Samsung has also slashed revenue expectations by ₩2tn to ₩47tn ($41.8bn).
The reduction in profits will hurt, but the real damage is being done to the company's share price which continues to fall following the Note 7 problems. More than $20bn has been wiped off Samsung's market value in two days.
Samsung announced on Tuesday that it has permanently ceased production of the Galaxy Note 7 after multiple reports of replacement models catching fire and exploding.
One of these involved Michael Lering of Kentucky, who woke up last weekend to find his bedroom filled with smoke and his replacement Galaxy Note 7 on fire. He was taken to hospital with acute bronchitis and smoke inhalation.
Another incident involved a new Note 7 that caught fire in Houston, Texas. Daniel Franks was having lunch with his wife and daughter when a replacement handset caught fire on the table.
"Because consumers’ safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note 7 while the investigation is taking place.
"Consumers with an original Galaxy Note 7 or replacement Galaxy Note 7 should power it down and stop using the device and take advantage of the remedies available."
Samsung has sent customers an elaborate returns kit (below) in a bid to make sure customers get rid of their potentially flammable device. The kit includes a static shield for protecting the phone, three boxes and a pair of gloves.
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