Samsung announces £6.55bn share buyback

South Korean tech giant Samsung reported good financial results in the third quarter and has announced a fairly large share buyback, a move which will most likely be welcomed by the company's investors.

According to a report by the AFP, net profit in the July-September period reached 5.46 trillion won (£3.15 billion)—an increase of 29.3 per cent on the previous year. The figures also mark the end of a streak of seven consecutive quarterly declines.

The profits came mostly from the components business which takes in chips, displays and screens. These industries mitigated the struggle Samsung has with Apple, Xiaomi and Huawei in the smartphone department. A weakened won against the dollar also helped the South Koreans.

However, the company warned that things might change for the worse in the fourth quarter, when the exchange rate benefits would be less pronounced. At the same time, Samsung announced it would buy back and cancel 11.3 trillion won in shares (£6.55bn), while also ramping up capital spending.

"Samsung believes that the current share price and the market value of Samsung Electronics are severely undervalued both in terms of the ability to generate earnings and also in terms of the underlying asset or equity value of the company," it said.

The announcement saw Samsung Electronics shares jump as high as 4.9 percent in early morning trading, before falling back to close up 1.3 percent.

There will be up to four stages in the buyback process, with the first one starting October 30, and lasting for approximately three months.