Samsung Electronics Announces $3.9 Trillion Won Share Buyback Plan

Samsung Electronics plans to carry out a share buyback worth 3.9 trillion won ($3.3 billion). The move aims to boost investor confidence and reduce the company's share float. The buyback will be the first in two years and will see the company repurchase 2.5% of its shares.

Samsung Electronics, the global leader in memory chip production, has announced plans to undertake a share buyback worth 3.9 trillion won ($3.3 billion). This strategic move is aimed at bolstering investor confidence and reducing the company's share float. The buyback, the first in two years, will involve the repurchase of 2.5% of the company's shares.

The announcement comes on the heels of Samsung Electronics' second-quarter earnings report, which revealed a significant decline in operating profit. The company estimated its operating profit to plunge by 55.9% from a year earlier, largely due to a sluggish chip business and the impact of US tariffs [1]. The expected operating profit for the quarter ending in June was 4.59 trillion won ($3.4 billion), a sharp decrease from the 10.44 trillion won ($7.8 billion) reported in the same period last year [1].

Market analysts had anticipated a more substantial drop, with estimates averaging 23.4% lower than the company's guidance [1]. The revenue for the quarter edged down by 0.1% to 74 trillion won ($57.5 billion) [1].

Samsung Electronics attributed the decline in profits to inventory replenishments and the impact of the US ban on exports of advanced AI chips to China [1]. Additionally, a delay in the supply of advanced high-bandwidth-memory products to Nvidia continued to weigh on the company's DRAM segment [2]. The smartphone business, which had been strong enough to offset weakness in the semiconductor segment, faces headwinds from US trade policies [2].

The share buyback is expected to take place over the next few months and will be executed at the market price. This move is part of Samsung Electronics' strategy to enhance shareholder value and maintain investor confidence in the face of challenging market conditions.

References:
[1] https://www.koreaherald.com/article/10526477
[2] https://www.marketwatch.com/story/samsung-electronics-poised-for-weak-second-quarter-operating-profit-earnings-preview-26daa3ba