Taiwanese smartphone maker HTC Corp (宏達電) on Friday night unexpectedly revised its financial guidance for this quarter downward, saying that sales could be nearly 30 percent lower than previous estimates of NT$46 billion to NT$51 billion (US1.48 billion to US$1.64 billion), slashing its sales forecast to between NT$33 billion and NT$36 billion.
The company also expects to lose from NT$9.7 to NT$9.94 per share this quarter, compared with its previous forecast of earning between NT$0.06 and NT$0.34 per share, HTC said in a statement.
“The change in revenue outlook is due to slower demand for high-end Android devices and weaker-than-forecast sales in China,” the company said.
The change in guidance followed the firm’s monthly sales release, in which HTC reported sales of NT$10.78 billion last month, down 48.79 percent year-on-year and 20.38 percent month-on-month.
HTC chairwoman Cher Wang (王雪紅) on Tuesday apologized to shareholders for the firm’s poor performance.
The company now expects gross margin to range from 19 to 19.5 percent for this quarter, down from previous guidance of between 23 and 23.5 percent.
HTC attributed the downward revision to product mix change and reduced scale, adding that increasing competition has raised expenses for product promotions and therefore pushed up operating costs.
Adding to the company’s financial woes is a one-off impairment of NT$2.9 billion this quarter for idled assets and some prepaid expenses in the quarter, HTC said.
The revised sales guidance suggests that quarterly sales would plummet by 49.27 percent at most from last year’s NT$65.06 billion and by 20.48 percent at most from the previous quarter’s NT$41.5 billion.
SinoPac Securities Investment Service Co (永豐投顧) said HTC’s revised guidance reflects that the firm’s flagship model One M9 is selling “very poorly.”
“Apparently, HTC’s flagship One M9 and its variations failed to drive sales for the past two months,” a SinoPac analyst who declined to be named told the Taipei Times yesterday.
The analyst said that since HTC does not have plans to launch any new smartphone models this month, monthly sales are likely to be less than last month’s NT$10.78 billion.
“It is very likely that sales this quarter could drop about 50 percent from last year’s NT$65.06 billion,” the analyst said.
SinoPac now expects HTC to ship about 16 million smartphones this year, down from last year’s 20 million.
Although Wang told shareholders that the company plans to launch a “hero” product in October and bolster its smartphone segment, its core business, the analyst said HTC might report a net loss this year.
Last year, HTC reported a net income of NT$1.48 billion, or NT$1.8 per share.
HTC shares dropped 8.25 percent this week to NT$92.8 on Friday in Taipei trading.
China’s chip industry is growing faster than anywhere else in the world, after US sanctions on local champions — from Huawei Technologies Co (華為) to Hikvision Digital Technology Co (海康威視) — spurred appetite for homegrown components. Nineteen of the world’s 20 fastest-growing chip industry firms over the past four quarters, on average, hail from the world’s No. 2 economy, data compiled by Bloomberg showed. That compared with just eight firms at the same point last year. Revenue at China-based suppliers of design software, processors and gear vital to chipmaking is increasing at several times the pace of global leaders Taiwan Semiconductor Manufacturing Co
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