Samsung Electronics is heading for its first annual earnings drop since 2011 after it revealed its profit for the three months from July to September would be the lowest in more than three years.

It also said short-term prospects for smartphones were uncertain. 

The world's smartphone leader has seen its global market share decline in annual terms for the past two quarters, out-classed by Apple's iPhones in the premium segment and undercut by Chinese rivals like Lenovo and Xiaomi at the bottom end.

Despite this, Samsung's shares rose due to expectations that the company's profits have bottomed and will pick up with the launch of cheaper smartphone models in the months ahead. 

Samsung said in a regulatory filing today that operating profit for the third quarter likely fell 59.7% to 4.1 trillion won ($3.8 billion), well below a mean forecast of 5.6 trillion won tipped by a Thomson Reuters I/B/E/S survey of 43 analysts.

This would mark the South Korean giant's weakest quarterly profit since the second quarter of 2011 and the fourth consecutive quarter of earnings declines on a yearly basis.

Samsung said that although "uncertainty" persisted in the mobile business, which accounted for nearly 70% of its 2013 operating profit, it "cautiously expects" higher shipments of new smartphones and strong seasonal demand for TV products. 

Operating margin for the smartphone business fell substantially in the quarter due to higher marketing expenditure and sharply lower average selling prices, as the proportion of shipments for high-end devices fell and prices for older models dropped, Samsung said. 

The firm has released new premium smartphones such as the Galaxy Note 4 in recent months, featuring metal frames in a bid to address complaints about the use of plastic in the past. 

Samsung also aims to launch more cost-competitive devices in the mid-to-low end segments. Analysts expect these products to appear by the end of October.

Samsung's chip division is a lone bright spot. The world's top memory chip maker said returns from its memory business in the third quarter improved sequentially due to strong seasonal demand.

Earlier this week, Samsung revealed plans to spend $14.7 billion on a new chip facility near Seoul - its biggest investment in a single plant - as it leans on its semiconductor business to offset weakness in smartphones.