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HTC quarterly net lags forecast amid tough competition
The company has said it will unveil new models in February that will be better and more competitive.
Taipei: Taiwanese smartphone maker HTC Corp recorded a worse-than-expected yearly profit decline in the fourth quarter, and the first decline in two years, as its models scrambled to compete with Apple Inc's iPhone and Samsung's Galaxy range.
The erstwhile investor darling shocked markets in November by slashing its fourth-quarter revenue guidance, sending its shares down 28 per cent in two weeks and 15 percent to date.
Investor concerns linger over whether HTC still has the innovative streak that catapulted it from an obscure contract maker to a top brand.
Samsung Electronics, the world's top maker of memory chips and smartphones, on the other hand reported a record quarterly profit on Friday, aided by one-off gains and best-ever sales of high-end handsets.
HTC's net profit in October-December was down 25.5 per cent to T$11.02 billion ($364.26 million), compared with T$14.80 billion a year earlier and T$18.68 billion in the previous quarter, it said on Friday.
Eighteen analysts have forecast a profit of T$13.33 billion for the world's No.4 smartphone maker, according to a poll by Thomson Reuters I/B/E/S.
Consolidated sales for December were T$26.36 billion, down 20.3 per cent from the same month a year earlier.
Net profit for the full year of 2011 was however up 57 percent from 2010 to T$62.05 billion. It did not give any details in a brief statement.
"December revenue was definitely lower than street expectations; I expect Q1 net profit will continue to fall year-on-year," said KGI securities analyst Richard Ko, citing news that HTC's new models will not start shipments until the second quarter and contribute to revenue.
The company has said it will unveil new models in February that will be better and more competitive, and will include new phones for the high speed LTE (Long Term Evolution) standard in the US market.
JP Morgan upgraded HTC earlier this week to "overweight," while mildly cutting its target price by 1.4 percent to T$680, citing new models expected to showcase next month at the Mobile World Congress that may give the Taiwanese company an opportunity to win back some lost ground.
On Friday ahead of the results announcement, HTC shares closed down 0.72 per cent at T$482.
HTC had a fairytale ride in 2010 and early 2011, when its shares more than tripled in the 14 months to April 2011 and sales grew four-fold in 1- years as consumers snapped up its innovative phones with their distinctive large clock numerals.
But an equally rapid fall from grace saw its stock become the worst performer among global smartphone companies last year, down 42 per cent, after Blackberry maker Research in Motion Ltd.
Squeezed of late between Apple's huge offering of apps for the iPhone and Samsung's big marketing budget that gives its Galaxy models extra clout, HTC's Desire, Sensation and Wildfire models have struggled to maintain the momentum.
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