Samsung Electronics to buy back 3.91 trillion won in shares after Q2 results fall short

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Samsung Electronics to buy back 3.91 trillion won in shares after Q2 results fall short

Published: 08 Jul. 2025, 09:48 Updated: 08 Jul. 2025, 14:50

Audio report: written by reporters, read by AI

Samsung Electronics flag at the company's Seocho building in southern Seoul on April 30 [NEWS1]

Samsung Electronics will repurchase 3.91 trillion won ($2.85 billion) of its own shares after reporting second-quarter results that fell greatly short of market expectations.

The company’s board approved the buyback of 56,888,092 common shares worth 3.51 trillion won and 7,834,552 preferred shares worth 401.9 billion won, according to a regulatory filing on Tuesday. The amounts were calculated based on the previous day’s closing prices — 61,700 won for common shares and 51,300 won for preferred shares.

Of the total, 2.81 trillion won worth of the shares will be retired to support the stock price and enhance shareholder value. The remaining 1.1 trillion won will be used for employee compensation.

The company said it plans to carry out the share retirement at an appropriate time in the near future. The specific timing and number of shares to be allocated for stock-based compensation to employees will be determined and disclosed through a future board resolution, the chipmaker said.

Samsung Electronics had previously agreed to apply a stock-based compensation program for executives under its Operational Performance Incentive (OPI) scheme to motivate employees and enhance corporate value.

Earlier in the day, Samsung Electronics reported 4.6 trillion won in operating profit for the second quarter of this year, down 55.94 percent from the same period last year.

An aerial view of Samsung Electronics' chip complex in Pyeongtaek, Gyeonggi [SAMSUNG ELECTRONICS]

Samsung Electronics reported its operating profit was also down by 31.24 percent in comparison to the previous quarter of this year. It marks the lowest quarterly operating profit since the fourth quarter of 2023 when it recorded 2.82 trillion won, and the lowest second-quarter figure in two years since the second quarter of 2023 when it posted 668.5 billion won.

Revenue came in at 74 trillion won, down 0.09 percent from the April-to-June period last year and 6.49 percent from the previous quarter.

The result fell far short of market expectations due to continued sluggish performance in the Device Solutions (DS) division, which handles the company's semiconductor business, coupled with provisions for inventory valuation losses.

“The DS division posted a decline in profit from the previous quarter due to inventory provisions and the impact of U.S. sanctions on advanced AI chips for China,” Samsung Electronics said in its explanatory filing.

“The memory business saw a drop in earnings due to one-off costs such as inventory valuation provisions,” the company added, “but improved high bandwidth memory products are currently undergoing client evaluations and shipments.”

“In the non-memory business, sales restrictions and related inventory provisions stemming from U.S. sanctions on advanced AI chips for China, along with continued declines in line utilization rates, contributed to the poor performance. However, we expect a gradual recovery in demand in the second half of the year to improve utilization rates and reduce losses.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY CHO MUN-GYU [[email protected]]