Samsung weak outlook as Q3 EPS approaches

A few weeks ago Samsung had recalled over 2.5 million Galaxy Note 7’s when the lithium-ion batteries inside the phones were reportedly overheating and catching fire. Over 60% of the faulty phones were traded in, and most were swapped for new Notes. Many expected that Samsung would resolve this quickly with their reputation on the line. When a replacement Galaxy Note 7 caught fire Wednesday morning on a flight bound from Louisville to Baltimore, Samsung declares that the investigation is still ongoing and there may be a reasonable explanation.

Samsung’s Q3’s earnings guidance will be released Friday. Google announced its Pixel smartphone that generated a lot of positive publicity for their breach into the smartphone business with their own product. This looks like a tough predicament for Samsung due to the fact its dominant position with Android is in jeopardy. Apple’s iphone 7 is also well received by the public.

There are few options left to Samsung, whether it’s to fix the Note 7 and re-release them or speed up their release of the Note 8. One other possibility is recalling the Note 7 and re-building a smartphone with the same features as the note 7 in order to persuade Samsung customers to stay loyal to their smartphone.

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