HTC Corp (宏達電), the world’s largest maker of handsets running Microsoft Corp’s system, yesterday reported that third-quarter net profits dropped 4.2 percent year-on-year after deducting employee bonus expense, marking its first income drop in five years.
Net profits fell NT$310 million (US$49.28 million) to NT$7.07 billion in the quarter ended Sept. 30, compared with NT$7.38 billion a year ago, a company statement showed. Revenues, however, expanded 30 percent to NT$37.86 billion during the same period.
The company said it was sticking to its full-year revenue target of a high 20 percent to 30 percent growth from last year’s NT$118.59 billion.
“The third quarter results match the company’s forecast,” HTC said in the statement.
Before booking expense for employee bonuses, net profits grew 14 percent annually to NT$8.41 billion. HTC also set aside about 15 percent of its profits for bonuses in the first half of the year after the law requiring companies to book bonuses as an expense went into effect this year. It plans to allocate 18 percent of its full-year profits to reward employees this year.
Yuanta Securities (元大證券) senior analyst Vincent Chen (陳豊丰) said that HTC’s third-quarter net profits were 14 percent lower than his forecast.
HTC has reported second straight disappointing quarterly earnings, suggesting that “earnings momentum has slowed down,” Chen said in a report yesterday.
The company’s financial results usually beat the expectations of most analysts, he said.
“We suspect the gross margin and operating margin could have come in lower than [the company’s] guidance of around 35 percent and 25 percent respectively,” said Chen, who rates HTC a “sell.”
Investors were concerned about mounting pricing and margin pressure in the field of smartphones after more competitors such as Nokia and Blackberry phone maker Research In Motion (RIM) joined Apple Inc in selling touch-screen handsets, Chen said.
Macquarie analyst Lu Chia-lin (呂家霖) said that the third-quarter profit fall might be a signal that “demand is slowing because of growing macroeconomic risks.”
HTC failed to meet Lu’s forecast of NT$8.04 billion in earnings.
To reach its goal of more than 30 percent growth in revenues, HTC would need to post another 30 percent rise in sales in the final quarter of this year, Lu said.
“Sales of Google phones will be the biggest driver,” plus contributions from other new models, Lu said.
HTC is the supplier of Google phones. Telecom operator T-Mobile is set to sell the world’s first batch of Google handsets running on the new Android operating system later this month in the US for US$179 along with a two-year contract.
Lu maintained his “outperform” rating on HTC, with a 12-month target price of NT$700.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS