Samsung profits sink 17% after Galaxy Note 7 recall
Samsung's third quarter profit has plunged 17% as Galaxy Note 7 recalls nearly wiped out its mobile profit.
The South Korean tech giant said yesterday that its July-September net income was 4.4 trillion won (€3.55bn), down from 5.3 trillion (€4.28bn) won a year earlier.
Shareholders voted to appoint the grandson of Samsung's founder to its board of directors as it grappled with the failure of its flagship smartphone.
The appointment of the Harvard-educated Lee Jae-yong, 48, chairman Lee Kun-hee's only son, comes at a crucial time for South Korea's biggest company.
Samsung, the world's largest maker of smartphones, memory chips and TVs, reported the sharp fall in its quarterly earnings after the unprecedented recall and discontinuation of the fire-prone Galaxy Note 7 smartphones.
The Note 7, initially launched as Samsung's weapon to kill the iPhone, was scrapped less than two months after its launch after consumers reported incidents of the devices catching fire.
Replacement Note 7s given for the recalled phones also were found to be overheating.
Samsung said its troubled mobile business generated just 100 billion won (€80.74m) in operating income during the quarter because it discontinued the Galaxy Note 7 smartphone.
Samsung's mobile business usually contributes more than half of its overall income.
Sales fell 7% to 47.8 trillion won (€38.59), while operating income slumped 30%, in line with the company's guidance earlier this month.
Lee Jae-yong is the grandson of Samsung's founder, Lee Byung-chull.
The younger Lee is thought to have been making key decisions for Samsung since his 74-year-old father suffered a heart attack in 2014 that left him unable to oversee the company.
