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Samsung warns of $A3.1b profit hit

Press AssociationPress Association 12/10/2016

Samsung has warned profits will take a STG1.9 billion ($A3.1 billion) hit from pulling its Galaxy Note 7 smartphones off the market.

The South Korean firm said third quarter operating profit is expected to come in at 5.2 trillion won ($A6 billion), down from previous estimates of 7.8 trillion won.

On Tuesday Samsung scrapped its flagship Galaxy Note 7 smartphone, a day after halting sales because of concerns over consumer safety.

In September the technology giant investigated and replaced faulty units that were overheating and exploding due to a battery defect.

However, new reports in the US raised further concerns that replacement devices were still catching fire and despite halting production to investigate the issue, the manufacturer has now chosen to completely withdraw the device.

Samsung's share price has taken a pounding since news of the defect broke, with more than $US18 billion ($A23.87 billion) wiped off its market value.

The company also cut its revenue estimate from 49 trillion won to 47 trillion won for the period.

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