Growth of smartphone business bolsters earnings, share price


Samsung Electronics Co., Asia’s biggest technology company, has ranked fifth in the global IT list of market capitalization, overtaking U.S. software firm Oracle Corp., data showed Tuesday.

Samsung, a frontrunner in the world’s semiconductor, mobile phone and flat-screen TVs, saw its market cap reach $136.9 billion as of Dec. 23. Oracle’s figure was $131 billion and it was the first time Samsung outpaced the U.S. software leader.

Only four IT giants boasted bigger market cap: Apple Inc., Microsoft Corp., IBM Corp., and Google Inc.

Late last year, Oracle’s market cap was $30 billion bigger than Samsung’s. At the height of the eurozone debt crisis this year, the gap widened to some $60 billion due to the sharp depreciation of the Korean won against the U.S. dollar. In recent months, however, Samsung staged a strong rally on the stock market, boosting its share price beyond the 1 million level on solid earnings and the stabilized currency rate.

Samsung shares benefited from the brisk growth in its smartphone business that bolstered its earnings despite the eurozone gloom that plagued the global markets this year.

Samsung’s net profit reached 3.44 trillion won ($3.09 billion) in the third quarter of the year, beating earlier forecasts, and the company expects its operating profit to climb to a record 20 trillion won next year.

“The global market was turbulent throughout this year, but the Korean economy was not seriously hurt, and local firms pulled off relatively solid earnings compared with other foreign companies,” said Ahn Soo-woong, analyst at LIG Investment & Securities.

Samsung also firmed up its position in the next-generation smartphone market by launching a new lineup of Long Term Evolution models that utilize a faster wireless network.

Samsung’s rivals on the global market, meanwhile, suffered setbacks. Japanese technology firms, for instance, had to swallow losses in lost production and damaged facilities generated by the earthquake and tsunami.

Samsung shares rose 7,000 won to close at 1,073,000 won Tuesday.

Korea’s top automaker Hyundai Motor also saw its market cap jump 20 percent to $41.2 billion, ranking fifth in the global automotive market.

Steelmaker POSCO has remained the leader in the global steel sector after overtaking ArcelorMittal in August.

By Yang Sung-jin (insight@heraldcorp.com)