Samsung unveils recovery plan

cunning-planSamsung has been talking about its cunning plan to recover quickly from the disastrous withdrawal of the Galaxy Note 7 that dragged down its third quarter mobile earnings to their lowest level in nearly eight years.

The outfit said it was expanding its probe into the Note 7 fires beyond batteries, as it tried to reassure investors that it would get to the bottom of the problem.

It suggested that it might be carrying out a share buyback to boost the share price. It also talked up its semiconductor business and promised to consider proposals for a corporate makeover.

Co-Chief Executive J.K. Shin told shareholders at the annual meeting that the company had to work hard to win back trust. He also apologised for the Note 7 debacle.

Investors are now expecting to see sweeping management changes in response to the Note 7 failure, especially after voting to make the parent conglomerate Samsung Group’s Jay Y. Lee, a Samsung Electronics director.

Lee, 48, the son of patriarch Lee Kun-hee who has been hospitalised following a heart attack, will now have a clearer mandate to play a public role in setting strategy.

Heads will roll but shareholders may have to wait for the Note 7 investigation to conclude first. Chief Executive Kwon Oh-hyun said at the shareholder meeting the company would assign responsibility only after the crisis was resolved.

The world’s top smartphone maker posted a 96 percent plunge in third-quarter mobile earnings to $87.63 million from a year earlier, their lowest level since the fourth quarter of 2008.

Operating profit was $4.57 billion, matching Samsung’s revised guidance.The scrapping of Samsung’s flagship phone erased 0.1 to 0.2 percentage points from South Korea’s third-quarter GDP growth in quarterly terms, a finance ministry official told Reuters on Tuesday.

Samsung SDI which supplied batteries blamed for the first Note 7 recall, separately reported a 110 billion won operating loss for the third quarter.