Smartphone vendor HTC Corp (宏達電) is likely to remain profitable this year, aided by the sale of its remaining stake in US-based headphones maker Beats Electronics LLC, an analyst said on Saturday.
“HTC is struggling amid fiercer-than-ever competition in the global smartphone market. The gains from the sale of the Beats stake is expected to strengthen HTC’s bottom line and help the smartphone vendor remain profitable this year,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
In a statement released on Friday, HTC said it will sell its remaining 24.84 percent stake in Beats for US$265 million, which would generate about NT$2.52 billion (US$ 85.27 million) in pretax profit.
During the transaction process, which is expected to be completed in the fourth quarter, Beats is to repay a US$150 million loan to HTC, the Taiwanese company said.
“That means that HTC could book about NT$3.9 in earnings per share [EPS] in the period from next month to December, which is expected to boost its bottom line,” Tang said.
It is widely expected among analysts and investors that HTC will incur losses in the third quarter amid concerns that it will not be able to achieve its sales target of NT$50 billion to NT$60 billion for the quarter, according to Tang.
He said that even if HTC’s consolidated sales hit the lower end of its third-quarter target range at NT$50 billion, the company could still suffer a quarterly net loss of about NT$2.9 per share.
In the first half of the year, HTC’s EPS stood at NT$1.60, sharply down from the NT$14.23 recorded in the same period last year.
“Although HTC shares have been hammered by foreign institutional selling amid worries over its shipments, the Beats stake sale announcement is likely to prompt some investors to pick up bargains, which will stabilize HTC stock prices to some extent,” Tang said.
In the first eight months of the year, the company’s shares suffered the steepest decline — 47.31 percent — of the 813 companies listed on the main board.
This month, HTC stock dropped another 17 percent, closing down 2.99 percent at NT$130 on Friday.
“Even if the Beats stake sale helps HTC shares rebound, the upside could be limited,” Tang said. “The asset disposal will only produce one-time gains and many investors will still be keeping a close eye on whether HTC will make a breakthrough in shipments.”
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks