Mon, Aug 05, 2013 - Page 13 News List

HTC buyback to start from today

Staff writer, with CNA

HTC Corp (宏達電) said on Saturday it would start buying back its shares today, with market analysts attributing the repurchase plan to the smartphone vendor’s efforts to support its weakening share price.

In a statement filed with the Taiwan Stock Exchange, HTC said its board of directors had approved a proposal to buy back 15 million shares from the market at a price range of between NT$140 and NT$290 from today to Oct. 4.

HTC shares have been hard hit in the past three sessions after the company said in an investors’ conference on Wednesday that its operating margin for the third quarter could range between zero and minus-8 percent, implying it could incur a net loss in the current quarter.

In the three sessions after the investors’ conference, HTC shares fell more than 16 percent on the main board on mass selling, in particular by foreign institutional investors.

On Friday, the stock fell 3.70 percent to close at NT$143.

Market sentiment toward HTC’s earnings prospects turned very fragile after the company gave its gloomy outlook for the third quarter.

Many analysts had forecast the company would launch a share buyback soon to boost its share price.

“Our overall gross margin has been impacted by a relatively higher cost structure, the lack of economies of scale and certain provisions needed to facilitate the clearance of ageing products in the channel,” HTC said in a statement issued on Tuesday last week.

HTC has also forecast its consolidated sales for the third quarter are set to range from between NT$50 billion to NT$60 billion (US$1.67 billion to US$2 billion), down from NT$70.7 billion recorded in the second quarter.

Several foreign brokerages, including UBS Securities, BNP Paribas, Citigroup Global Markets and Bank of America Merrill Lynch have issued target prices on HTC shares of less than NT$100.

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