HTC posts low profit for Q1 after shipment delays

BOTTLENECK::The smartphone firm said it would resolve the delaying problem of key component shortages as soon as possible in order to maintain its consumer base

By Helen Ku  /  Staff reporter

Tue, Apr 09, 2013 - Page 13

Smartphone vendor HTC Corp (宏達電) yesterday posted its lowest quarterly profit on record for the first quarter of the year, as the company struggled to ship new products on time.

First-quarter net profit shrank 15 percent quarter-on-quarter and 91.5 percent year-on-year to NT$850 million (US$28 million) last quarter, with earnings per share of NT$0.1, the company said in a statement.

Due to delayed shipment of the new HTC One — the Taoyuan-based company’s latest offering to try to reinvigorate its sales growth momentum after losing part of its market share to the US’ Apple Inc and South Korea’s Samsung Electronics Co — HTC’s first-quarter sales fell 36.88 percent year-on-year to NT$42.79 billion from NT$67.79 billion a year earlier.

First-quarter sales were also 14.42 percent short of the company’s forecast of between NT$50 billion and NT$60 billion.

Last month alone, consolidated revenue grew 39.67 percent month-on-month to NT$15.88 billion from NT$11.37 billion in February.

However, the figure was 48.57 percent lower than the NT$30.88 billion in the same period last year.

“The smartphone market is getting too competitive. The new HTC One seemed to boost the company’s sales by one month only because of shorter product cycles in the market,” Hua Nan Securities Co (華南永昌投顧) chairman David Chu (儲祥生) said by telephone yesterday.

Following the launch of the HTC One in London and New York, HTC said the product would be available as early as the middle of last month, but because of shortages in metal musings and other key components, shipments of the new model were delayed until late last month.

Chu said HTC would resolve the problem of key component shortages as soon as possible in order to maintain its consumer base.

“Samsung’s new flagship smartphone Galaxy S4 is hitting the market, followed by Apple’s iPhone 5S. HTC might be able to see the new HTC One drive up its monthly sales to NT$20 billion this month, but whether the product can extend the company’s product cycle remains the question,” Chu said.

Meanwhile, Catcher Technology Co (可成科技), which supplies metal casings for HTC’s new product and Apple’s iPhones, on Sunday said its sales last month reached a record high of NT$3.88 billion.

The figure reflects a 88.9 percent month-on-month expansion and a 28.5 percent year-on-year increase.

During the period from January to last month, Catcher’s consolidated revenue fell 6.9 percent quarter-on-quarter from NT$9.91 billion in the fourth quarter of last year to NT$9.23 billion, which met the company’s estimate of a between 5 percent and 10 percent.

On an annual basis, the first-quarter number represents a 6.7 percent increase from NT$8.66 billion.