Tue, Oct 09, 2012 - Page 13 News List

HTC announces low profit, suffers fierce competition

By Kevin Chen  /  Staff reporter

Smartphone vendor HTC Corp (宏達電) yesterday posted the lowest quarterly profit since 2005 as the Taiwanese brand continues to suffer from fierce competition and the economic slowdown.

The Taoyuan-based company also saw consolidated revenue for the July-to-September quarter reach the low end of its earlier guidance, although the figure was lower than market expectations.

Shares in HTC, the world’s No. 5 smartphone maker, fell 0.86 percent to NT$287 in Taipei trading yesterday, ahead of the release of last quarter’s results. The stock has dropped nearly 78 percent from a NT$1,300 high in April last year, the Taiwan Stock Exchange’s data showed.

HTC, which makes and sells the Desire, Sensation and One smartphones, said in an e-mailed statement that its net profit for last quarter was NT$3.9 billion (US$132.6 million), or NT$4.7 per share, the lowest since the third quarter of 2005, when it posted NT$2.64 billion in net profit.

Last quarter’s profit was a 79.12 percent plunge from profit of NT$18.68 billion a year ago, or NT$22.07 per share, and a 47.31 percent decline from a quarter-earlier profit of NT$7.4 billion, or NT$8.9 a share, according to the company’s data.

HTC also said its sales dropped 12 percent month-on-month to NT$21.13 billion last month, driving its consolidated revenue for the third quarter to NT$70.2 billion, which represented a decline of 48.31 percent from the NT$135.82 billion the company posted a year earlier and compared with NT$91 billion in the previous quarter.

The third-quarter sales number met the low end of the company’s guidance issued on Aug. 3 that its revenue could shrink by double digits to a range of between NT$70 billion and NT$80 billion because of a weak macroeconomic climate and stiff competition with Apple Inc and Samsung Electronics Co.

The median estimate in a Bloomberg survey of eight analysts was for a third-quarter net profit of NT$4.43 billion and a consolidated revenue of NT$75 billion.

HTC did not elaborate on its third-quarter performance in the statement yesterday, nor did it provide sales guidance for this quarter.

Analysts have predicted the company’s net profit could reach NT$5.2 billion this quarter on a revenue of NT$76.5 billion.

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