HTC Corp (宏達電) could miss its financial forecast for the first quarter of this year due to delayed shipments of its new HTC One flagship phone, JPMorgan Securities said.
HTC is expected to post revenue of NT$45 billion (US$1.5 billion) in the January-to-March quarter, well below the company’s target of between NT$50 billion and NT$60 billion, JPMorgan wrote in a research note on Friday.
It also cut its estimates for HTC’s shipments for the first quarter from 7.3 million units to 5.6 million units, and to 7.9 million units in the second quarter from the 8.9 million units it originally forecast.
“We cut our first-quarter and second-quarter unit estimates to reflect production issues with the new HTC One smartphone and a sharp deceleration in China sales,” JPMorgan analyst Alvin Kwock (郭彥麟) wrote in the note.
“HTC’s eggs are all in ‘One’ basket now. Given the positive consumer reviews, we suggest closely monitoring the production of the new HTC One in the second half of April,” said Kwock, who gave HTC’s stock an “underweight” rating and set a target price of NT$160.
According to JPMorgan’s research, HTC has shipped between 2 million and 3 million units per month of the new One smartphone, despite the company’s limited marketing.
However, the company faces a severe shortage in optical image stabilizers, a key component in the phone’s camera, which means that it is only able to ship between 500,000 and 700,000 units this month, Kwock said.
Kwock attributed HTC’s declining sales in China in the past two quarters to price cuts by rivals Samsung Electronics Co, Apple Inc and several Chinese brands.
HTC shares closed down 1.64 percent at NT$240.5 in Taipei trading yesterday.
In a separate report, Macquarie Securities cut its target price for HTC shares from NT$200 to NT$142, and also gave the stock an “underperform” rating, citing the firm’s worsening shortages of critical components and increasing competition from Samsung’s Galaxy S4 model.
“We don’t expect the shortage to be resolved until the end of April, by which time Samsung may have begun to ship its S4 to operators,” said Daniel Chang (張博淇), an analyst at Macquarie Capital Securities Ltd’s Taiwan branch.
As a result, Macquarie lowered its monthly shipments forecast for the HTC One in the second quarter from between 1.5 million and 2 million, to between 1 million and 1.5 million units, a revision of between 25 percent and 30 percent.