The South Korean firm now expects third quarter profits of 5.2tn won ($4.7bn; £3.8bn), which is a third lower than its original estimate of 7.8tn won, reports The BBC.
The Note 7 was recalled last month after battery fires, but after replacement phones experienced the same problem, Samsung scrapped the device.
Ahead of the profit warning, Samsung shares fell 0.8 per cent on Wednesday.
That added to Tuesday’s 8 per cent fall.
The company has seen more than $20bn wiped off its market value in two days.
Samsung’s shares have fallen on concerns that the current crisis will go beyond the costs of the recall and affect the brand’s overall reputation.
Analysts are suggesting the Note 7 crisis could cost Samsung in the long run, particularly coming just as rivals, such as Google and Apple, have announced new high-end smartphones.
The Note 7 had been seen as the main rival to Apple’s new iPhone 7 model. Samsung’s woes have sent Apple’s shares to a 10-month high.
In September, Samsung recalled around 2.5 million phones after complaints of exploding batteries.
It later insisted that all replaced devices were safe. However, that was followed by reports that those phones were catching fire too.
But on Tuesday, the company said it would permanently cease production of the device and urged owners to turn it off.
