Samsung profit rises on record semicon earnings

SEOUL – Samsung Electronics Co. reported its first earnings growth in more than a year on Thursday as a record profit from computer chips masked a decline in its smartphone business.

But the company predicted its fourth quarter profit would decline as the boost that its chip business is getting from a strong dollar is expected to fade.

Its third-quarter net income was 5.3 trillion won ($4.6 billion), up 28 percent over a year earlier. That was lower than the 5.6 trillion won forecast in survey of analysts by financial data provider FactSet.

Samsung posted a record profit for its semiconductor division helped by sales of chips to Apple Inc. and favorable currency exchange rates. But the company’s smartphone business posted its lowest profit in three quarters, after it cut prices for some of its high-end Galaxy smartphones.

Sales of 51.7 trillion won were up nine percent from a year earlier. Operating profit jumped 82 percent to 7.4 trillion won.

Samsung’s stock price surged as much as four percent after it announced a plan to increase shareholder returns, including buying back and cancelling $10 billion worth of stock over the next year. It also promised to return as much as 50 percent of its annual free cash flow to shareholders for the next three years.

In the July-September quarter, Samsung posted 3.66 trillion won ($3.2 billion) in operating profit from its semiconductor division alone, accounting for about half of the company’s overall profit. Samsung said its revenue from the foundry division, which supplies application processors powering Apple’s iPhones, increased from the previous quarter.

Lucrative display panels known as OLED helped Samsung’s display division earn 0.9 trillion won in operating profit. Samsung said it secured supply deals with a wider number of smartphone makers around the world for its OLED screens.