Wed, Nov 06, 2013 - Page 13 News List

HTC predicts up to 14.89% sales slide

HOT COMPETITION:HTC said it aims to see sequential sales growth and is set to roll out a new mobile phone, but the forecast for sales this quarter is not promising

By Helen Ku  /  Staff reporter

HTC Corp (宏達電) yesterday forecast sales this quarter would fall sequentially to between NT$40 billion and NT$45 billion (US$1.36 billion and US$1.53 billion), indicating a contraction of between 4.25 percent and 14.89 percent from the NT$47 billion recorded last quarter.

“Our goal is to seek sequential sales growth, that is what we are aiming for,” HTC chief financial officer Chang Chia-lin (張嘉臨) told investors during a conference call.

In a bid to explore emerging markets, especially China, HTC has shifted its focus to selling more mid-end smartphone models while continuing to develop high-end ones, Chang said.

Due to severe competition in a smartphone market dominated by Samsung Electronics Co and Apple Inc, HTC has seen its global market share shrink to less than 2 percent as of December last year and posted a net loss of NT$2.97 billion last quarter, its first quarterly loss since the fourth quarter of 1999.

Its losses per share during the July-to-September period were NT$3.58.

For this quarter, HTC said its operating margin would slide to about 20 percent from 20.4 percent last quarter and forecast earnings per share to rebound to profits of between NT$0.1 and NT$1.7, after the company registered nonoperating income of US$415 million from its divestment in US headphone maker Beats Electronics LLC, Chang said.

The company's consolidated sales for last month fell 17.38 percent month-on-month and 12.89 percent year-on-year to NT$14.99 billion, HTC said in a statement.

“HTC’s priority now is to enlarge its market share in the mid-end smartphone market, particularly in China, to raise its sales,” an analyst who spoke on condition of anonymity said by telephone.

As HTC still considers Samsung its main competitor, it is crucial for the company to collaborate with China’s largest telecom, China Mobile Ltd (中國移動), to edge out Samsung, the person said.

During the conference call, analysts asked if HTC plans to be acquired by or merge with China Mobile, but Chang said: “We don’t comment on speculations.”

While HTC plans to strengthen its presence in the Chinese smartphone market for products priced higher than 1,000 yuan (US$950), the company dismissed analysts’ inquires about its plan to join the entry-level smartphone market.

“This [smartphone industry] is a very fast-changing industry,” Chang said, adding that HTC will roll out its new-generation flagship smartphone in the following quarters.

Chang also denied rumors that HTC is seeking to trim operational costs by shutting down some of its factories, saying the company is open to different eventualities.

He also declined to comment on speculations that the company is transforming into a contract manufacturer, saying that HTC is not aiming to cut costs to generate profits, but to “optimize” its business.

HTC’s shares closed down 6.95 percent at NT$140.5 yesterday.

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