Slash and burn: Samsung just cut profit forecasts by a third

Lynsey Barber
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Samsung's woes continue with lowered profit forecast (Source: Getty)

Samsung has slashed its profit outlook for the quarter by a third after the feted launch of its flagship Galaxy Note 7 ended in a fiery recall.

In an update to markets, the South Korean firm slashed its estimates for the quarter to the end of September to 5.2 trillion won (£3.8bn), dialling back on initial estimates of 7.8 trillion won.

It also adjusted revenue estimates from 49 trillion won for the quarter to 47 trillion.

Read more: Game of phones: Apple handed lucky break by Samsung's flaming disaster

The disastrous recall ended with replacement handsets experiencing the very same problem leading it to ditch production of the device entirely.

The move wiped as much as $18bn from the electronics brand's share price with analysts predicting longer-term damage to its reputation.

The troubles at what is the world's largest smartphone maker is expected to hand an advantage to rivals, including Apple, which is understood to be ramping up production of its own flagship phone, the iPhone 7, partly in response to the Samsung crisis.

Read more: Will Samsung’s image burn and crash after Galaxy fires?

Newer smartphone rivals from Asia such as Huawei and Oppo are also likely to benefit.

"Not only does Huawei have stated ambitions to be number one globally within five years but the pace of growth at the likes of Oppo and Vivo should have the incumbent leaders concerned," said Northern Trust Capital Markets analyst Neil Campling.

"Apple will potentially benefit in the Western markets in the key Christmas selling period given their primary rival continues to suffer from this fallout."

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