Samsung warns of $5.3bn hit to profits from Note 7 saga

Samsung Electronics has said its profits will take a $5.3bn (£4.3bn) hit from costs associated with its failed Galaxy Note 7 smartphone.

The South Korean firm has endured a torrid week in which it decided to scrap the model altogether after failing to overcome lithium-ion battery problems which led to phones overheating and exploding.

It had initially insisted that replacement models were safe.

As the firm continued to lick its wounds and provide support to recall efforts, it told investors on Friday it was now forecasting an additional $3bn knock to profits in the looming financial quarters ahead.

That sum was on top of the $2.3bn hit it said would likely to be booked in the July to September period.

The update was the third forecast to be issued by Samsung in a week. It had originally predicted a 6% increase to operating profits to $7bn for its last quarter - boosted by strong sales in its component business.

It will officially report its numbers later this month.

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Samsung confirmed on Tuesday it was stopping production of the device - just two months after it was launched.

It suspended sales last month and is now expecting the return of more than 1.5 million phones, most of which were sold in the US and South Korea, on top of models covered by the previous recall.