Roundup: Samsung Electronics' Q3 profit posts double-digit growth on upbeat chip sales

Samsung Electronics, the world's largest maker of smartphones, memory chips and TVs, posted a double-digit growth in its third-quarter operating profit thanks to a record quarterly profit in the chip-making business, the company said Thursday.

Consolidated operating profit reached 7.39 trillion won (6.48 billion U.S. dollars) during the July-September period, up 82.08 percent from the same period of last year, the company said in a statement.

It was up 7.18 percent from the previous three-month period.

This topped market expectations of about 6.5 trillion won, and slightly exceeded the company's preliminary earnings guidance of 7.3 trillion won.

After bottoming at 4.06 trillion in the third quarter of 2014, the profit kept growing to 5.98 trillion won in the first quarter and 6.9 trillion won in the second quarter this year.

Revenue amounted to 51.68 trillion won in the third quarter, up 8.93 percent from a year earlier and 6.48 percent from the previous quarter.

Net income advanced 29.28 percent from a year earlier to 5.46 trillion won in the third quarter.

The semiconductor business led the upbeat third-quarter earnings. The chip-making unit's operating profit came to 3.66 trillion won, surpassing the previous record high of 3.42 trillion won tallied in the third quarter of 2010.

Revenue in the semiconductor division reached a new high of 12.82 trillion won in the third quarter, up from the prior quarter's 11.29 trillion won.

The weakening of the South Korean currency to the U.S. dollar helped boost Samsung's overseas earnings when repatriated, especially in parts-making businesses like chips and displays.

The division, which produces display panels, logged an operating profit of 930 billion won during the quarter on revenue of 7.49 trillion won.

The unit, which makes smartphones, posted a third-quarter operating profit of 2.4 trillion won in the third quarter, down from 2.76 trillion won in the previous quarter. The unit's revenue was nearly unchanged at 26.61 trillion won.

Sales of Samsung smarthpones, including newly launched Galaxy Note 5 and Galaxy S6 Edge Plus, increased in the quarter, but the lowered prices of mobile devices and rising portion of low-end device sales resulted in a decline in operating profit.

The consumer electronics business posted an operating profit of 360 billion won on revenue of 11.59 trillion won.

As part of the shareholder-friendly moves, Samsung said in a separate statement that it will buy back and cancel 11.3 trillion won worth of its own shares, equivalent to 10 billion U.S. dollars, to lift the valuation of its stocks.

It marked the largest buyback plan in the company's history. During the first phase that will run for three months from Friday, Samsung will purchase back 2.23 million shares of common stock and 1.24 million shares of preferred stock worth 4.2 trillion won.

Samsung said that its current stock price is "severely undervalued" in terms of its ability to generate earnings and its underlying asset or equity value. Samsung shares surged more than 6 percent to 1,388,000 won as of 9:50 a.m. in Seoul trading after the buyback plan announcement.

Until now, Samsung has spent its earnings on research and development and facility investment for future growth. It has invested more than 20 billion dollars in capital expenditure and 12 billion dollars in R&D in the past several years, the company said.

Samsung separately announced its three-year "shareholder return policy" that will return 30-50 percent of annual free cash flow to shareholders through dividend and share buyback. Enditem