Samsung's 7 consecutive quarterly profit-making investors are unmoved

The foreign media wrote today that Samsung Electronics again refreshed quarterly earnings records in the third quarter of this year, but investors were still unmoved. The unit needs new catalysts, and it should help to return more cash to investors. Samsung achieved net profit of 8.24 trillion won (about 7.76 billion US dollars) in the third quarter, up 26% per cent year-on-year. It was the company's seventh consecutive quarter to record a new profit, but its share price still underperformed – down nearly 5% per cent this year. Investors are worried that Samsung's success in the smartphone market will be unsustainable. Differentiation is a big challenge, and Samsung relies on Google's Android operating system, as do many of its rivals, including cheap handset makers in countries such as China. In the third quarter, the company's mobile division operating profit margins actually grew, from 17.7% in the previous quarter to 18.3%. That is because marketing spending has fallen-Samsung launched a massive marketing campaign in the second quarter of the flagship smartphone GalaxyS4. But smartphone sales are slowing, and mobile business margins are below 19.2% per cent over the same period last year, a negative sign of long-term growth. Samsung's chip business has a more optimistic outlook. Its operating profits from memory chips and logic chips doubled over the year. The spike in the storage chip price may have been due to a fire in a Chinese factory in September. Although this kind of help is only temporary, but in the long run, as the industry tends to consolidate, manufacturing computing power chips more difficult, such as Samsung, Intel, TSMC, such as industry giants will continue to enjoy the advantage. To win back the favor of investors, Samsung should start returning more cash to them. Worried about the slump in share prices, Samsung will hold its second-ever analyst day meeting next month – the first time in eight years. It is likely to be pressured to return cash to investors. As of September, Samsung was sitting on $49.6 billion trillion in cash, as of June, the figure was 42 billion dollars. But the dividend yield on the stock is still only 0.6%, well below Apple's 2.3%. Apple's shares have risen more than 30% since the announcement in April this year of more cash to return to shareholders through dividends and stock buybacks. Carl Icahn, a billionaire and activist investor, has again pressured Apple to move further in this Icahn, but Samsung seems to be the stingy investor.