Samsung Electronics vows mobile rebound, dangles buyback after Note 7 shock
By Se Young Lee
SEOUL (Reuters) - Samsung Electronics Co Ltd on Thursday said it aims to recover quickly from the disastrous withdrawal of the fire-prone Galaxy Note 7 that dragged third-quarter mobile earnings to their lowest level in nearly eight years.
The South Korean giant said it was expanding its probe into the Note 7 fires beyond batteries, as it tried to reassure investors that it would get to the bottom of one of the worst product failures in tech history.
It also held out the prospect of greater returns by disclosing consideration of a share buyback, talked up its semiconductor business and promised to consider proposals for a corporate makeover from U.S. hedge fund Elliott Management.
"We know we must work hard to earn back your trust and we are committed to doing just that," said Co-Chief Executive J.K. Shin as he apologized for the debacle at a general meeting in Seoul following the release of the company's results.
Investors expect sweeping management changes in response to the Note 7 failure, especially after voting on Thursday to make parent conglomerate Samsung Group's [SAGR.UL] de facto chief, Jay Y. Lee, a Samsung Electronics director.
Lee, 48, the son of patriarch Lee Kun-hee who has been hospitalized following a heart attack, will now have greater accountability at the group's flagship company and a clearer mandate to play a public role in setting strategy.
But shareholders may have to wait for the Note 7 investigation to conclude before seeing any heads roll at the family-run conglomerate.
Samsung Electronics Chief Executive Kwon Oh-hyun said at the shareholder meeting the company would assign responsibility only after the crisis was resolved. Continued...