HTC Corp (宏達電), the manufacturer of the world’s first phone running Google’s Android system, yesterday posted a 31 percent decline in revenues for the fourth quarter amid rising operating costs.
Last quarter’s net income dropped to NT$5.58 billion (US$175 million), compared with a revised profit of NT$8.09 billion a year earlier, HTC said in a statement. That figure also represented a 2 percent drop quarter-on-quarter.
Revenues dropped 13 percent to NT$41.08 billion in the fourth quarter, from NT$47.38 billion a year ago, meeting the company’s earlier forecast of between NT$40 billion and NT$42 billion.
PHOTO: BLOOMBERG
For the whole year, net profit shrank 21 percent to NT$22.65 billion from NT$28.64 billion in 2008. Revenue fell 5 percent to NT$144.88 billion from NT$152.56 billion in the previous year, said HTC, which is scheduled to give its quarterly outlook during a teleconference with investors on Jan. 26.
“HTC released better-than-expected revenues, but its earnings do not match the pace. This means that the company may spend more on marketing its branded phones than it disclosed,” Lu Chia-lin (呂家霖), who tracks the handset industry for Macquarie Securities, said by telephone yesterday.
In November, Taoyuan-based HTC said it would allocate a bigger share of its revenues — as much as 17.5 percent — to promote its smartphones amid growing competition, compared with 14 percent in the third quarter last year and 11.5 percent in the final quarter of 2008.
New orders from Google Inc and US telecoms operator Verizon Wireless could be the major driving force behind HTC’s strong sales last month, Lu said.
“HTC has began shipping Nexus One to Google last month. We believe the partnership will have a positive impact on HTC, as the gross margin is not bad,” Lu said.
HTC could ship about 2 million Nexus One phones to Google this year as the online search giant seeks to boost sales through a new online shopping service.
Citigroup analyst Kevin Chang (張凱偉), however, was more cautious about Google’s move in the handset sector.
It would be “impossible for HTC to make 30 percent gross margin” with Nexus One, Chang said in a report yesterday.
HTC financial executive officer Cheng Hui-ming (鄭慧明) told Bloomberg yesterday that the phone would have a profit margin similar to that of HTC’s branded devices.
Google’s new phone could cause a severe blow to HTC’s current models, most of which retail for more than US$550. The Google Nexus One is sold for US$529 without telecoms services, or starting at US$179 with a two-year service contract, Chang said.
Shares of HTC inched up 0.4 percent yesterday to NT$373.5, underperforming the benchmark TAIEX, which gained 1.42 percent.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS