Smartphone maker HTC Corp (宏達電) yesterday said that revenue could reach about NT$43 billion to NT$47 billion (US$1.41 billion to US$1.55 billion) this quarter, an increase of 2.71 percent to 12.27 percent from NT$41.86 billion in the third quarter.
The company’s sales guidance represents annual growth of 9.6 percent from NT$42.9 billion a year earlier, as HTC has high hopes on contributions from its mid-tier smartphones and a new Nexus 9 tablet co-branded with Google Inc.
“The revenue this quarter will be better than last quarter and will be better than the fourth quarter last year,” HTC chief financial officer Chang Chia-lin (張嘉臨) told investors in a conference call yesterday.
Chang said that the sales momentum from HTC’s various products was likely to continue through the first quarter next year.
“Our non-smartphone product shipments may turn stronger this quarter due to the upcoming Christmas shopping season,” he said, adding that the launches of its selfie-focused phone HTC Desire Eye and a waterproof action camera, Re, early last month as well as the new Nexus tablet should help boost sales momentum this quarter.
HTC forecast that earnings per share would be between NT$0.07 and NT$0.46 for this quarter, the third consecutive quarter in the black, after it reported a net income of NT$0.6 billion, or NT$0.78 per share, last quarter.
However, gross margin would decline from 22.9 percent last quarter to 19 percent to 21 percent this quarter, the company projected.
Commenting on the firm’s long-term strategy, Chang said HTC wants to become the “brand of choice” — the brand that allows people to share their everyday life experiences via various devices.
Re camera is one of the devices than promotes this concept, he added.
HTC also dismissed rumors about plans to go into original design manufacturing (ODM).
“Be it handsets or tablets, we are not going to do ODM business,” Chang said, adding that HTC would consider co-branding opportunities with partners if it brought the company long-term growth potential.
HTC does not consider the “Google tablet as an ODM business,” he said, adding that it is a co-branding partnership as HTC’s logo is on the product.
The company has made it clear in the past that it is always open to co-branding opportunities that promote HTC’s name, he said.
Chang said that he could not comment on tablets’ material contribution for the time being, but that he could confirm that the new tablet’s initial pre-order was strong.
While the company does not provide a revenue breakdown, it intends to show the year-on-year growth in handset shipments, he said.
“We forecast a pretty mature growth in handset shipments this quarter compared with last quarter,” he said.
Despite HTC’s optimism, some analysts like Yuanta Securities Investment Consulting Co’s (元大投顧) Jeff Pu (蒲得宇) remain skeptical.
Pu said in a client note yesterday that HTC’s near-term revenue strength is “not sustainable.”
HTC’s mid and low-end momentum is unlikely to continue, and the company’s non-smartphone business also poses just a temporary lift, he said.
As for ODM, “we do not believe HTC will do well due to [its] inferior cost structure,” he wrote in the note.
HTC’s sales plunged 36 percent to NT$41.86 billion last quarter, from NT$65.1 billion in the previous quarter.
Cumulative sales for the first nine months of the year totaled NT$140.04 billion, down 12.75 percent from a year earlier.
The company’s shares rose 1.13 percent to NT$134.50 in Taipei trading yesterday, ahead of the firm’s conference call.
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