South Korea’s electronics behemoth Samsung Electronics Co. battling with worst-ever product crisis and a global recall that could cost the company nearly $3 billion as well as its reputation as the world’s top smartphone maker on Wednesday slashed July-September operating profit guideline to 5.2 trillion won ($4.6 billion) from 7.8 trillion won it reported last Friday.

The sales figure during the same period was also scaled down to 47 trillion won from 49 trillion won cited a few days ago before the company announced on Tuesday full halt to global production, sales, and exchanges for Galaxy Note7 after devices replaced after a month-long fix to battery with propensity to explosion also reported overheating and case of catching fire.

The company also said it would refund all Galaxy Note7 replacement phones in cash or phones in other Samsung models or entirely different brands including iPhones and also pay in cash voucher for the remaining sum. The refund program will stretch to the end of the year.

Early September, the company announced it would recall and replace all 2.5 million Galaxy Note7 phones that were first released in Korea, the United States, and selective China mid-August.

The company reflected the first round of recall in the preliminary figures released last week, but the earnings were met well because they beat expectations. It reported better than expected 7.8 trillion won profit although off from strong second-quarter profit of 8.14 trillion won.

The company quickly fixed the guidance data as stock price has been tumbling upon reports of the major setback in its latest smartphone innovation that could be more or less an end to the model. Shares finished Wednesday at 1,535,000 won, losing 10 percent from Friday.

“We reflected all expenses from the suspension of production and sales,” said an official of the electronics company.

The revised third-quarter profit is down 30 percent from the year-ago period and sales 9 percent. Against the previous quarter, profit plunged 36 percent and sales 7.7 percent.

“We decided to halt production and sales of Galaxy Note7 because we put customers’ safety as top priority,” it said in a disclosure statement.

By Lee Seung-hoon

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