HTC Corp (宏達電), the world’s largest maker of smartphones that use Microsoft Corp and Google Inc’s operating systems, posted record quarterly profits and revenue on the back of strong market demand.
Third-quarter net income climbed 95 percent to NT$11.1 billion (US$360 million) from NT$5.7 billion a year earlier and rose 29 percent from NT$8.6 billion in the second quarter.
Consolidated revenue more than doubled from last year to NT$76 billion in the third quarter and rose 24.6 percent from NT$61 billion in the second quarter. That beat the company’s July forecast for third-quarter revenue of NT$70 billion.
HTC’s third-quarter revenue was 9 percent lower than -Citigroup’s forecast, but its quarterly net income beat the brokerage’s estimate by about 2 percent, Citigroup analyst Kevin Chang (張凱偉) said in a client note yesterday.
Chang said HTC’s third-quarter earnings were slightly higher than his forecast because of higher-than--expected operating margin of 16.3 percent versus the company’s own guidance of 14.5 percent to 16 percent made in July.
“We reckon the [company’s] operating margin expansion was driven by operating leverage and further [product] mix improvement,” Chang said.
The company forecast in July that third-quarter smartphone shipments would hit 6.5 million units, compared with 5.4 million units in the second quarter.
Third-quarter shipment figures were not available in yesterday’s statement, but the company indicated in its news release that last month sales were “impacted by product transition with small initial shipments of new products, but volume shipment of new products will start from October.”
Looking ahead, analysts expected HTC’s recent new product launches, including T-Mobile G2, Desire HD, Desire Z and the upcoming new models for Windows Phone 7, to help boost performance from last month onward. Moreover, HTC is reportedly launching its iPad-like device in the first quarter next year.
Yuanta Securities Co (元大證券) expected HTC to ship 9 million units of handsets in the fourth quarter, while Steven Tseng (曾緒良), an analyst from RBS Asia Limited’s Taipei Branch, said in a report on Sept. 17 that he forecast a shipment of 8.3 million units for the quarter.
Yuanta predicted HTC to deliver revenue of about NT$98 billion in the period from this month to December, while other analysts expected an earnings per share of more than NT$17 in the quarter.
“However, it could be challenging for HTC to deliver upside to the fourth-quarter shipment expectation of 9.5 million-10 million units.”
Based on HTC’s third--quarter sales, Citigroup estimated the company shipped around 7 million units in the quarter. As such, it would need the company to deliver 40 percent quarter-on-quarter shipment growth in the final quarter to reach market expectations, he said.
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