After rough 2014, Samsung eyes growth and acquisitions

Samsung started doling out more cash to its shareholders last year, but it warned that kind of treatment may not continue in 2015.

Instead of more investor goodies, the South Korean electronics giant will look to direct its $56 billion cash reserves toward growth, investor relations chief Robert Yi said in an interview with Reuters, published Tuesday.

"Dividends and other forms of shareholder returns are responsibilities that the company has for shareholders, so we will make efforts to meet them," he told the publication. "But our primary objective is growth and that is what we are communicating to our shareholders."

South Korean firms are known for being tight-fisted with their funds, so they rarely shower shareholders with niceties like higher dividend payments or stock buybacks. However, Samsung did both in 2014, boosting its dividend payment by 40 percent and offering its first share repurchase since 2007. Samsung apparently was trying to keep shareholders from bolting for the exit, after it reported its first profit decline in three years. Samsung, the No. 1 smartphone maker in the world, has been getting squeezed by its competitors, with Apple stealing customers at the high end of the market and Chinese vendors like Xiaomi and ZTE gaining ground at the low end.

Although it's become a more active shopper in the past two years, Samsung hasn't made major acquisitions lately, disappointing some investors. But Yi signaled that the company may consider more, and perhaps bigger, deals on the mergers and acquisitions front.

"We are primarily focused on M&A deals for companies that would be good fits to Samsung's current businesses," Yi told Reuters, "and we believe that know-how and experience accrued from such transactions will make bigger M&A deals possible going forward."

Samsung has been trying to revive its mobile brand by coming out with new phone designs -- such as the curved-screen Galaxy Note Edge -- and cheaper handsets with better specifications. It's also trying to differentiate by pushing its own operating system, called Tizen, instead of the broadly used Android operating system from Google. The company is expected to reveal its new flagship Galaxy S6 phone next month.

Those efforts haven't paid off yet, as rivals have kept gaining on Samsung. Most notably, Apple tied with Samsung for the title of world's biggest smartphone vendor in the fourth quarter, according to research firm Strategy Analytics. That marked a major gain for Apple after it came out with its bigger-screen iPhone 6 and iPhone 6 Plus smartphones.