Taiwanese smartphone maker HTC Corp (宏達電) yesterday said its net income for last quarter hit the high end of its forecast, thanks mainly to non-operating income.
The company said net income was NT$360 million (US$11.56 million), or earnings per share of NT$0.43, for the first quarter of this year, compared with a loss of NT$1.88 billion the previous year.
However, the firm’s operating income of only NT$20 million raised concerns from analysts.
“The low operating profit suggests that HTC’s core business was not strong last quarter,” said a Yuanta Securities Investment Consulting Co (元大投顧) researcher, who declined to be named.
HTC’s operating income accounted for just 3.92 percent of the firm’s pre-tax profit of NT$510 million last quarter, after operating profit in the third quarter and the final quarter of last year accounted for less than 30 percent of pre-tax profit, according to the firm’s filings with the Taiwan Stock Exchange.
The company’s core business contributed 87.99 percent of its profits in the second quarter of last year, followed by 24.49 percent in the third quarter and 28.47 percent in the final quarter, the company’s filings with the Taiwan Stock Exchange showed.
Revenue totaled NT$41.52 billion in the first quarter, which was in line with the firm’s sales guidance of between NT$41.5 billion and NT$45 billion.
Commenting on HTC’s performance this quarter, the Yuanta researcher said he still believes that demand for HTC’s latest flagship product, the One M9 smartphone, would be weaker than expected, because of the lack of a “wow” factor.
“We expect quarterly income will grow less than 50 percent this quarter as we think the new flagship product will not contribute significantly compared with previous flagship models over the past years,” he said.
He said with Samsung Electronics Co’s latest Galaxy S6 and curved display S6 Edge gaining traction worldwide, he believes global telecoms favor Samsung’s products over HTC’s.
Moreover, the upcoming M9 Plus and the cheaper-priced E9 series would possibly “cannibalize” the demand for the existing flagship M9, the Yuanta researcher said.
HTC is schedule to hold a product launch in Beijing today and it is widely expected to introduce the One M9 and two variants of the One series, including a 5.1-inch One M9 Plus and the 5.5-inch One E9 Plus.
HTC shares climbed 2.93 percent to close at NT$140.5 in Taipei trading yesterday, outperforming the TAIEX, which gained 0.43 percent.
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