Samsung Electronics' Q3 dividend jumps 12-fold, investors remain disappointed
A person looks at a mockup of high-bandwidth memory 4E at Samsung Electronics' booth for the SEDEX 2026 semiconductor trade show in Seoul, Oct. 14. Yonhap
Chip giant logs $80.4 bil. in Q3 operating profit
Samsung Electronics will pay out 30 trillion won ($22.5 billion) in dividends for the third quarter, increasing its dividend per share more than 12-fold in a move to address the mismatch between its sluggish share price and record-breaking earnings performance.
The company reported an operating profit of 107.44 trillion won and revenue of 195.25 trillion won for the July-September period, up 783.1 percent and 126.9 percent year-on-year, respectively, on Thursday. The chipmaking Device Solutions Division accounted for most of the profit, logging 147.1 trillion won in sales and 106.5 trillion won in operating profit.
However, investors reacted with disappointment, as the company had already signaled plans to increase its dividends and delayed the announcement of additional shareholder return measures until next year. Samsung Electronics shares closed at 232,000 won on Thursday, down 4.13 percent.
At a board meeting, Samsung Electronics approved a quarterly dividend of 4,601 won per share for both common and preferred shares, more than 12 times its quarterly payout of around 370 won per share in the first and second quarters. The dividend will be paid on Nov. 27.
The company said it plans to return between 90 trillion won and 110 trillion won to shareholders this year, of which 55 trillion won to 75 trillion won has yet to be distributed or committed. It plans to return the remaining amount through cash dividends and substantial share buybacks and cancellations, but said “the specific amounts and methods would be finalized and announced alongside its next shareholder return policy at a board meeting scheduled for late January next year.”
"We are holding in-depth discussions on a new shareholder return policy for next year and beyond to achieve both sustainable growth and enhanced shareholder value," the company said.
The pledge of up to 110 trillion won was already announced at a board meeting in August under the company's existing policy of returning 50 percent of free cash flow generated between 2024 and 2026 to shareholders.
Apart from approving the proposed dividend increase, the overall amount earmarked for shareholder returns remained unchanged, and the company offered no hints about its next shareholder return policy.
As investors focused on how quickly Samsung Electronics would return the cash generated by its record-breaking earnings to shareholders, the company's unprecedented third-quarter performance was overshadowed by disappointment over the clarity of its future shareholder return plans.
The memory business significantly expanded sales of high bandwidth memory 4 (HBM4) in response to growing artificial intelligence demand and as well as rising demand for server solid-state drives.
“Negotiations for next year's HBM supply have been completed at our target prices, and the entire volume has already sold out," the company said. "Major customers continue to request additional HBM supplies."
The company also said it has signed long-term supply agreements with 10 major customers, adding that it expects supply to remain tight through 2028.
HBM4 revenue more than tripled from three months earlier, accounting for approximately 60 percent of the company's total HBM revenue. The company also achieved its annual target of securing an HBM market share equivalent to its overall DRAM market share in the third quarter.
People walk past the Samsung logo at Samsung Electronics' office in Seoul, Thursday. Yonhap
On the other hand, the Device Experience Division, which handles smartphones and home appliances, posted 52.1 trillion won in sales and an operating loss of 800 billion won, as rising memory chip prices weighed on its profitability.
In particular, the Mobile Experience business, which produces smartphones and other mobile devices, posted an operating loss of 600 billion won. The company expected that “memory chip prices will likely remain high and business conditions will be challenging in the fourth quarter,” but said it plans to respond by improving its product mix and reducing costs.
Samsung Electronics plans to spend 84.4 trillion won on capital expenditures in 2026, including 76.8 trillion won for the Device Solutions Division.