SEOUL--After three years of struggle, shares of Samsung SSNHZ 0.00 % Electronics Co. roared to an all-time closing high on Thursday, capping a 30% rally this year that underscores the technology giant's improved fortunes. Shares of the world's largest maker of smartphones by shipments jumped 4.7% to finish the day at 1,640,000 Korean won ( 1,480) a share, giving it a market capitalization of 232 trillion won ( 210 billion). That makes Samsung five times as valuable as Japan's Sony Corp. SNE 1.61 % and puts it within striking distance of Chinese internet giants Alibaba Group Holding Ltd. BABA -0.14 % and Tencent Holdings Ltd. TCEHY 0.57 % as Asia's most valuable technology companies. It also puts Samsung ahead of Intel Corp. INTC -0.47 %, Coca-Cola Co. and Visa Inc. V -0.80 % in market-cap rankings, though its main rival Apple Inc. AAPL 0.16 % 's market cap of 562 billion--the world's largest--remains nearly three times that of Samsung. Samsung's surge comes after the Suwon, South Korea-based company reported its most profitable quarter in two years last month, as operating profit at its mobile unit jumped 57% in the April-to-June period from a year earlier.
SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd said on Thursday its second-quarter operating profit likely rose 17.4 percent from a year earlier, its highest in more than 2 years as Galaxy S7 smartphone sales propelled mobile earnings. The world's top maker of smartphones and memory chips said its April-June profit was likely 8.1 trillion won ( 7 billion), better than the average forecast of 7.8 trillion won tipped by a Thomson Reuters survey of 16 analysts. It was the highest since a 8.5 trillion won profit in the first quarter of 2014. The mobile division likely was the top earner for the second straight quarter, raising the question of whether the South Korean company can sustain this strong momentum in the face of competition from Apple Inc and cheaper Chinese rivals. "At this point it appears unlikely that we'll see stronger competing devices emerging (in the second half)," IBK Asset Management fund manager Kim Hyun-soo said.
In this Sept. 9, 2015, photo, Apple CEO Tim Cook introduces the iPhone 6S during an Apple media event in San Francisco. SAN FRANCISCO-- Despite iPhone sales of 51 million that met analyst expectations, Apple posted FY Q2 earnings and revenue that missed on both revenue and earnings per share Tuesday. The company posted quarterly revenue of 50.6 billion and quarterly net income of 10.5 billion, or 1.90 per diluted share, short of analyst predictions of 52 billion and EPS of 2, according to analysts polled by S&P Global Market Intelligence. Apple shares (AAPL) closed down 0.7% at 104.35 but plummeted 7% in after-hours trading. Apple's poor results highlight diminished iPhone demand Those 51 million iPhones represent a 16% decline over the same quarter a year ago, and mark the first year-over-year drop since the trendsetting smartphone debuted in 2007.
Samsung Electronics, the world's largest smartphone maker, has recorded better than expected first quarter profits thanks to the successful early release of its new flagship Galaxy handset. The result will encourage shareholders after a disappointing 2015 that saw Samsung lose more than 8bn in market value, with its smartphone business sandwiched by top-end rivals like Apple's iPhone and lower-end devices from fast-growing Chinese outfits like Huawei and Xiaomi. In an effort to defend its smartphone share, Samsung rolled out the latest version of its Galaxy S7 smartphone in March – a month earlier than the previous year and ahead of new launches by its competitors. Boasting an improved camera, waterproofing and microSD storage support, Galaxy S7 models are on track to set a new first-year shipments record, boosting hopes the mobile business will post its first annual profit gain in three years. "The first quarter saw overall earnings growth led by the early launch and successful sales of the flagship Galaxy S7 and S7 edge," the South Korean company said on Thursday.
South Korea's economic growth for Q3 has slipped to its lowest level in more than a year, with Samsung's recall of the Galaxy Note 7 having had an impact. Bank of Korea said on Tuesday that Asia's fourth-largest economy expanded 2.7 percent during the July-September quarter from a year before, the slowest growth since Q2 2015. Growth from the previous quarter was 0.7 percent and on a quarter-to-quarter basis, the country's economy has grown less than 1 percent in the last year. According to Korea's central bank, the manufacturing sector declined as a result of slumping handset sales from Samsung's Galaxy Note 7 recall. Samsung is now offering customers a Galaxy S7 or S7 Edge as a replacement for the Note 7 devices, with the addition of a refund covering the price difference.