Many questions still persist after Samsung officially ceased production of the Galaxy Note 7. What caused the devices to explode? Why has Samsung been so cagey about addressing the issue publicly? And how much is this whole fiasco going to cost them?
We now can answer the third question—at least $2.3 billion.
According to regulatory filings released this afternoon (Oct. 12), Samsung has slashed its expected operating profit for the third quarter from 7.8 trillion won ($6.9 billion) to 5.2 trillion won ($4.6 billion), marking a 33.3% quarter-on-quarter drop and a 30.3% decrease on-year. The company lowered its expected revenue from 49 trillion won ($43.6 billion) to 47 trillion won ($41.9 trillion). Samsung is due to report its earnings on Oct. 27.
Earlier analyst estimates on the cost of the Galaxy Note 7 disaster ranged from $1.5 billion to $5 billion.
Samsung Electronics issued the guidance revision after markets in Seoul closed, so it’s not clear how deeply it will affect its share price. Today the company’s stock price fell further after a steep plunge on Monday on the heels of news that the company would permanently halt production of the Galaxy Note 7. Despite the company’s woes, investors have driven Samsung Electronics’ share price up to new records this year based on strong sales and profit expectations in its OLED screen and semiconductor units—which will potentially have to compensate for losses in its smartphone division.