Fri, May 03, 2013 - Page 13 News List

HTC expects ‘One’ to boost Q2 sales

ROSIER FUTURE:The smartphone vendor expects its gross margin to improve to up to 24 percent and its operating margin to grow by between 1 percent and 3 percent

By Helen Ku  /  Staff reporter

Smartphone vendor HTC Corp (宏達電) yesterday said it expects sales to expand by 63.55 percent quarter-on-quarter this quarter due to its new flagship HTC One model.

Sales are expected to reach NT$70 billion (US$2.37 billion) during the April-to-June period from NT$42.8 billion in the first three months, after the new HTC One hit the market last month, the company said in a conference call.

“This [the first quarter of the year] was a pivotal quarter for HTC,” HTC chief executive officer Peter Chou (周永明) said. “In February, our teams set a new standard for smartphones, launching the new HTC One. The reviews of fans and critics alike have been overwhelmingly positive and we look forward to delivering on the promise of this device.”

Chou forecast HTC’s gross margin would be further improved as early as next quarter due to the launch of other new products.

The company expects its gross margin this quarter to improve to between 22 percent and 24 percent from 20.3 percent in the previous quarter, and its operating margin to grow by between 1 percent and 3 percent.

However, the company’s second-quarter sales forecast still reflects a 23.08 percent year-on-year decline from the NT$91 billion in revenue HTC made in the same period of last year.

Taoyuan-based HTC saw its sales slide for three consecutive quarters since the second quarter of last year, amid patent disputes with Apple Inc and Samsung Electronics Co, as well as delayed product shipments.

Last quarter, HTC failed to meet its revenue target of between NT$50 billion and NT$60 billion due to delayed shipments of the HTC One following a shortage of key components.

With the marketing budget doubled to heavily promote the HTC brand and its products on the global market, first-quarter operating margin and net profit fell to a record low of 0.04 percent and NT$85 million respectively, with earnings per share of only NT$0.1.

Asked if the company would further increase its marketing expenses, HTC chief financial officer Chang Chia-lin (張嘉臨) said the company’s marketing campaign would continue through the second half of the year in order to sustain the sales momentum of the HTC One.

Chou said HTC would continue aggressively promoting its products and brand in the US, Europe, the Middle East, Africa and China this year.

The company plans to collaborate closely with telecoms all over the world to ensure smooth shipments of its new products, he added.

HTC shares closed down 1.99 percent at NT$295 in Taipei trading yesterday, after the company announced on Wednesday it plans to distribute a NT$2 cash dividend to shareholders, the lowest level since 2002.

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