HTC forecasts revenue lower than estimates due to keen competition
Source: Bloomberg News |
00:33 UTC+8 February 7, 2012
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HTC Corp yesterday forecast revenue that missed analysts' estimates as it awaits the introduction of new products to help Asia's second-largest smartphone maker rebound from its first profit drop in two years.
First-quarter sales will be NT$65 billion (US$2.2 billion) to NT$70 billion, the Taiwan-based company said in a statement. Revenue is expected at NT$84.9 billion, according to the average of 14 analysts' estimates compiled by Bloomberg News. HTC didn't provide a shipment forecast.
Competition from Apple Inc and Samsung Electronics prompted HTC in November to cut its sales forecast, a move that preceded its first profit decline since 2009. A lack of new models this quarter may delay HTC's attempts to catch up with rivals as the popularity of advanced smartphones drives growth in the mobile-phone market.
''It's going to be a transition period because their newer models were selling badly and they're awaiting fresh products,'' said Aaron Jeng, who rates the stock ''neutra'' at Nomura Holdings Inc in Taipei. ''We need to wait for next quarter to see how those new handsets perform in the market.''
HTC attributed the forecast for sales, set to be the lowest since the second quarter of 2010, on ''product transition,'' Chief Financial Officer Winston Yung said on a conference call. He declined to provide fourth-quarter shipments or estimates for the current period, the first time HTC didn't provide sales volume data.
''Our weakness in first-quarter guidance also comes from facing competition in the US from iPhone and Samsung,'' Yung said. ''LTE handsets also didn't meet our expectations.''
In 2009 HTC offered handsets using the fourth-generation long-term evolution, or LTE, technology which allows faster downloads than 3G models.
Stiff competition also hurt shipments in Europe, where the impact was smaller, Yung said. Sales in Asia remain very good, he said.
Adding local content and cooperating with retailers will help the company drive growth on Chinese mainland where it has ''high expectations'' this year, Yung said.
Operating margin, which tracks the percentage of sales less operating costs, will drop to 7.5 percent this quarter, from 12.7 percent in the previous three months, HTC said. That's the lowest in at least three years, according to data compiled by Bloomberg News.
First-quarter sales will be NT$65 billion (US$2.2 billion) to NT$70 billion, the Taiwan-based company said in a statement. Revenue is expected at NT$84.9 billion, according to the average of 14 analysts' estimates compiled by Bloomberg News. HTC didn't provide a shipment forecast.
Competition from Apple Inc and Samsung Electronics prompted HTC in November to cut its sales forecast, a move that preceded its first profit decline since 2009. A lack of new models this quarter may delay HTC's attempts to catch up with rivals as the popularity of advanced smartphones drives growth in the mobile-phone market.
''It's going to be a transition period because their newer models were selling badly and they're awaiting fresh products,'' said Aaron Jeng, who rates the stock ''neutra'' at Nomura Holdings Inc in Taipei. ''We need to wait for next quarter to see how those new handsets perform in the market.''
HTC attributed the forecast for sales, set to be the lowest since the second quarter of 2010, on ''product transition,'' Chief Financial Officer Winston Yung said on a conference call. He declined to provide fourth-quarter shipments or estimates for the current period, the first time HTC didn't provide sales volume data.
''Our weakness in first-quarter guidance also comes from facing competition in the US from iPhone and Samsung,'' Yung said. ''LTE handsets also didn't meet our expectations.''
In 2009 HTC offered handsets using the fourth-generation long-term evolution, or LTE, technology which allows faster downloads than 3G models.
Stiff competition also hurt shipments in Europe, where the impact was smaller, Yung said. Sales in Asia remain very good, he said.
Adding local content and cooperating with retailers will help the company drive growth on Chinese mainland where it has ''high expectations'' this year, Yung said.
Operating margin, which tracks the percentage of sales less operating costs, will drop to 7.5 percent this quarter, from 12.7 percent in the previous three months, HTC said. That's the lowest in at least three years, according to data compiled by Bloomberg News.
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