Samsung tips 6 percent gain in 3Q profit after recall

The Korean electronics giant said Thursday that it expects its operating profit during the period to come in at 7.7 trillion won ($6.9 billion), a modest increase of about 5 percent compared with the same period previous year.

Analysts had lowered expectations Samsung's third-quarter earnings after it announced a global recall of at least 2.5 million Note 7s in 10 markets, including the United States and South Korea, due to faulty batteries causing some phones to catch fire.

The smartphone maker said it is expecting its July to September profits close to $7 billion. Samsung said it traced the problem to a battery issue and last month began shipping replacement units.

Samsung is still recovering from the recall of its Galaxy Note 7 flagship and it seems that the company just can't catch a break. However, revenue for the quarter is expected to fall 5.2 percent to 49 trillion won, the company said. It also urged Samsung, a company whose products range from smartphones to refrigerators to semiconductors, to split into two companies.

Samsung disclosed only overall estimates in its filing, and isn't scheduled to issue full results with details of how its business lines performed until late October.

That was followed by global airlines banning the phone during flights and official recalls by the governments in the US and Canada. Samsung uses the lucrative OLED screens for its top-end phones, including the Galaxy S7 and Galaxy S7 Edge phones, whose sales were not affected by the Note 7 recall. Royal Mail reportedly refuses to ship Galaxy Note 7 units fearing incidents and there have been some reports indicating that Samsung could launch a second recall of the Galaxy Note 7. Singer-owned Elliott Management Corp. believes the change would simplify Samsung Electronics' ownership, make the business more transparent and bring tax benefits, the report said.

The latest blow to Samsung's brand happened earlier this week when a US domestic plane with 75 passengers had to be evacuated because of a Samsung phone emitting smoke before the plane's takeoff.

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