HTC Corp (宏達電), the manufacturer of the world’s first phone running Google’s Android system, yesterday posted a 31 percent decline in revenues for the fourth quarter amid rising operating costs.
Last quarter’s net income dropped to NT$5.58 billion (US$175 million), compared with a revised profit of NT$8.09 billion a year earlier, HTC said in a statement. That figure also represented a 2 percent drop quarter-on-quarter.
Revenues dropped 13 percent to NT$41.08 billion in the fourth quarter, from NT$47.38 billion a year ago, meeting the company’s earlier forecast of between NT$40 billion and NT$42 billion.
PHOTO: BLOOMBERG
For the whole year, net profit shrank 21 percent to NT$22.65 billion from NT$28.64 billion in 2008. Revenue fell 5 percent to NT$144.88 billion from NT$152.56 billion in the previous year, said HTC, which is scheduled to give its quarterly outlook during a teleconference with investors on Jan. 26.
“HTC released better-than-expected revenues, but its earnings do not match the pace. This means that the company may spend more on marketing its branded phones than it disclosed,” Lu Chia-lin (呂家霖), who tracks the handset industry for Macquarie Securities, said by telephone yesterday.
In November, Taoyuan-based HTC said it would allocate a bigger share of its revenues — as much as 17.5 percent — to promote its smartphones amid growing competition, compared with 14 percent in the third quarter last year and 11.5 percent in the final quarter of 2008.
New orders from Google Inc and US telecoms operator Verizon Wireless could be the major driving force behind HTC’s strong sales last month, Lu said.
“HTC has began shipping Nexus One to Google last month. We believe the partnership will have a positive impact on HTC, as the gross margin is not bad,” Lu said.
HTC could ship about 2 million Nexus One phones to Google this year as the online search giant seeks to boost sales through a new online shopping service.
Citigroup analyst Kevin Chang (張凱偉), however, was more cautious about Google’s move in the handset sector.
It would be “impossible for HTC to make 30 percent gross margin” with Nexus One, Chang said in a report yesterday.
HTC financial executive officer Cheng Hui-ming (鄭慧明) told Bloomberg yesterday that the phone would have a profit margin similar to that of HTC’s branded devices.
Google’s new phone could cause a severe blow to HTC’s current models, most of which retail for more than US$550. The Google Nexus One is sold for US$529 without telecoms services, or starting at US$179 with a two-year service contract, Chang said.
Shares of HTC inched up 0.4 percent yesterday to NT$373.5, underperforming the benchmark TAIEX, which gained 1.42 percent.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
RSS