Taiwanese smartphone maker HTC Corp’s (宏達電) shares plummeted 5.7 percent to NT$124 yesterday, as investors were disappointed by the firm’s lower-than-expected sales forecast for this quarter.
The stock underperformed the TAIEX, which lost 1.03 percent.
On Tuesday, HTC forecast revenue for this quarter would be between NT$46 billion and NT$51 billion (US$1.5 billion and US$1.67 billion), which is lower than the market’s consensus estimate of NT$66 billion, despite the launch of the firm’s flagship One M9 smartphone last month.
The sales forecast translates into a quarterly growth of between 10.78 percent and 22.83 percent, much lower than UBS Securities Pte Ltd’s estimate of 39 percent growth and market expectation of 56 percent.
Market analysts attributed HTC’s lower-than-expected sales forecast to weak demand for the One M9 and other mid-priced HTC products.
“HTC might have underestimated the negative impact from the performance of Qualcomm’s processor S810 and its thermal issue, which have resulted in poor reviews and less confidence from telecom operators,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Jeff Pu (蒲得宇) said in a note yesterday. “We believe HTC’s 2015 flagship cycle will be the shortest and weakest ever.”
UBS analyst Arthur Hsieh (謝宗文) said the One M9 appears to have limited differentiation compared with the M8 and the firm might have to spend more marketing resources to promote it.
Hsieh said HTC’s higher gross margin forecast of between 23 percent and 23.5 percent and lower sales guidance for this quarter suggests that demand for the firm’s mid-range products is falling.
“The company has to accelerate the introduction of new mid-range products to keep up with the competition and secure its share in the market,” Hsieh said.
HTC reported net profit of NT$360 million last quarter, or NT$0.43 per share, on revenue of NT$41.52 billion.
Other foreign brokerages yesterday lowered their target price on HTC shares, with Credit Suisse Group cutting to NT$140 from NT$150, Deutsche Bank AG slashing to NT$120 from NT$145 and JPMorgan Securities revising its target downward to NT$100 from NT$105.
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