Taiwan handset maker HTC Q4 net profit down 26%, Q1 outlook uncertain
Taiwan handset maker HTC Corp. said Friday its unaudited fourth-quarter net profit fell 26%, its first quarterly decline in two years, as a result of intensifying competition and slower demand for smartphones amid the uncertain global economic outlook.
The Taoyuan-based company, which has grabbed market share in the U.S. and Europe through its early adoption of Google Inc.'s Android platform for mobile phones, is facing challenges in those key markets from rivals Samsung Electronics Co., Apple, Nokia Corp. and Motorola Mobility Holdings Inc., all of which have quickly expanded their premium smartphone offerings.
HTC said in a statement its unaudited net profit for the three months ended Dec. 31 fell to NT$11.02 billion (US$365 million) from NT$14.80 billion a year earlier. Its fourth-quarter revenue fell by 2.5% to NT$101.42 billion from NT$104.01 billion.
HTC, which had been at the center of a widening patent battle with Apple in the U.S., didn't comment on the results.
Analysts said investors will be watching HTC's guidance for its 2012 business strategy and product roadmap, as many expect the booming smartphone market to cool against the backdrop of the weakening global economy.
They added that HTC's shares may continue to be under pressure due to downside risks to its first-quarter earnings until better clarity emerges on its new product offers and the competitive smartphone landscape from the second quarter.
The share price of the world's fifth largest smartphone maker by shipments in the third quarter has fallen 46% since January 2011 as a result of the intense competition and uncertainties over its patent disputes with Apple. HTC's shares closed down 0.7% to NT$482.00 Friday.
"The market has already expected HTC to report weak handset shipments in the first quarter as it is always a low season after strong holiday sales in the fourth quarter," said Aaron Jeng, an analyst at Nomura,"Investors are more eager to know how HTC will tap into the relatively resilient emerging markets this year when European markets are going to remain weak.
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