Galaxy Z Flip 4 Preorder Quest 2: Still the Best Student Internet Discounts Best 55-Inch TV Galaxy Z Fold 4 Preorder Nintendo Switch OLED Review Foldable iPhone? 41% Off 43-Inch Amazon Fire TV
Want CNET to notify you of price drops and the latest stories?
No, thank you

Samsung Electronics to buy back $2B in shares

The move is viewed as part of Samsung's plan to placate shareholders that have grown increasingly concerned about its declining smartphone business.

Samsung's troubles have prompted the company to issue a stock-buyback program. CNET

Samsung Electronics -- the division of Samsung that produces a wide range of devices, including smartphones and wearables -- has announced a major stock-buyback program.

Samsung plans to buy back 1.9 million shares of stock, representing about 1.1 percent of its total shares outstanding, for approximately $2 billion, the company announced on Wednesday. The share buyback is the first since 2007 for the company and is aimed at giving shareholders money back while they continue to hold on to the company's stock.

Share buybacks are conducted on a regular basis among public companies. Apple, for instance, buys shares back to deliver cash back to shareholders. Other major companies, including carmaker Hyundai, have done the same. The idea is to deliver to shareholders some of their investment in the company and continue to build value in the stock for those folks and any subsequent shareholders.

Though Samsung has provided precious little information on why it's planning to buy back shares, it might have something to do with the increasing concern emanating from its stockholder ranks. Samsung is well on its way to posting its lowest annual profit since 2011, and shares are down nearly 13 percent since the start of the year.

A key reason for those issues has been Samsung's smartphone business, which has been hit hard by increasing competition in several key markets, including China, where it's no longer the most popular smartphone brand in that country. Xiaomi, a China-based company that offers higher-end devices at affordable prices, now holds that crown.

Samsung has acknowledged its troubles in the mobile business, saying that its high marketing costs, associated with increased competition, have hurt its shipments. That was followed by a report earlier this week saying that one of its flagship smartphones, the Galaxy S5, actually saw sales slide worldwide compared with its predecessor, the Galaxy S4. Sales were, however, up in the US, according to the report.

Samsung did not immediately respond to a request for comment.