Wed, Oct 09, 2013 - Page 13 News List

HTC recovers after clarification

‘BIGGEST CHALLENGE’:The smartphone vendor said chairwoman Cher Wang’s comment refers to a marketing strategy challenge, and not financial difficulties

Staff writer, with CNA

HTC Corp’s (宏達電) shares stabilized yesterday after plunging a day earlier following the company’s clarification of a remark made by chairwoman Cher Wang (王雪紅), dealers said.

In an interview with Bloomberg published on Monday, Wang said the fourth quarter would pose the “biggest challenge” to the smartphone vendor.

Investors interpreted the comment as a sign that HTC would face financial difficulties this quarter after reporting a net loss in the third quarter, and proceeded to dump the stock.

However, HTC said in a statement released late on Monday that the “challenge” Wang spoke of referred to the uphill battle of finding a good marketing strategy to help the company compete, rather than financial problems.

HTC shares closed up 0.4 percent at NT$126.50 yesterday, with 11.13 million shares changing hands, after the stock fell 7 percent, the maximum daily decline, on Monday.

The TAIEX closed up 0.5 percent at 8,375.65 yesterday.

Market analysts said that after a recent sell-off because of concern over the smartphone vendor’s sales prospects, HTC shares could see short-term technical support at about NT$122.

In clarifying Wang’s remarks in the interview, HTC also said the company has cutting-edge technology and the best products in the global smartphone market, which it described as its most precious assets.

HTC added that it was determined to grab a higher market share by using more creative and effective marketing measures to attract consumers.

According to Bloomberg, HTC’s global market share fell to 2.8 percent in the second quarter from 5.8 percent during the same period last year.

Amid fierce competition, HTC reported a net loss of NT$2.97 billion (US$100.5 million) last quarter, or a net loss per share of NT$3.58. It was the first quarterly loss posted by the smartphone vendor since it went public in March 2002.

HTC reported consolidated sales of NT$47 billion last quarter, falling short of its estimated sales range of NT$50 billion to NT$60 billion, and had an operating loss of NT$3.5 billion.

In a research report, Credit Suisse said it would not rule out the possibility that HTC could post another loss this quarter, but added that the sale of the company’s remaining stake in US-based headphone maker Beats Electronics LLC could help its bottom line to some extent.

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