Welcome Guest Login | Register | Site Map | | Make TelecomTiger my homepage     
Telecom News
Enterprise |  Policy & Regulation |  Mobiles & Tabs |  Corporate |  VAS |  People Movement  |  Technology  |  LTE
HTC cuts Q4 growth forecast
TT Correspondent |  |  25 Nov 2011

Taiwan''s HTC Corp cut its revenue forecast for the fourth quarter to no growth over the same period a year earlier from around 20 per cent to 30 per cent year on year growth previously, surprising the market and sending its shares tumbling 7 per cent. 

According to Reuters report, the world's No.4 smartphone maker has been facing a slowdown in shipment growth in the second half of this year after growth more than doubled in the first half, as competition from bigger rival such as Apple Inc and Samsung intensifies and the global economy weakens. 

"This new guidance takes us by complete surprise and is at odds with recent discussions we have had with distribution channels, especially in Europe," Sanford C. Bernstein senior analyst Pierre Ferragu said in a note to client. 

HTC did not give a specific revenue forecast for the fourth quarter in a stock exchange statement on Wednesday. Revenue in the fourth quarter of 2010 was T$104 billion ($3.42 billion). 

In October HTC had warned of slowing fourth quarter revenue, forecasting T$125 billion to T$135 billion, compared with T$135.8 billion in the third quarter. 

It said in the filing that it had confidence in its products and business and forecast a pick up in revenue in the first half of 2012. 

Its shares fell by the 7 percent maximum allowed in a day on Thursday, in a broader market that opened down 0.8 percent. 

The revenue forecast cut also led Credit Suisse to cut its rating on HTC to neutral from outperform, and cut its target price for the shares by 27 percent to T$680. 

HTC's new guidance implies 20-25 percent quarterly decline in the fourth quarter, Credit Suisse said, and a two-million miss in smartphone units. 

The broker attributed HTC's forecast cut to insufficient new product ramp ups to offset market share losses in the U.S. as Apple expanded its distribution channel. 

In a separate stock exchange filing on Wednesday, the Taiwanese smartphone maker said it will re-evaluate the acquisition of graphics technology firm S3 Graphics after a U.S. commission ruled Apple Inc did not violate patents owned by S3 Graphics. 

That ruling sent HTC shares to an over one-year intraday low on Tuesday, as it lowered HTC's chances in its pending lawsuit against Apple and raised the possibility that it may face a ban on sales of its products in the U.S., from where it derives 50 percent of its revenue. 

HTC planned to buy S3 in part to boost its defense against the patent suit by Apple. The acquisition would extend its IP portfolio with the addition of 235 patents and pending applications.

 mail this article    print this article    Show and Post comment
25 Nov 2011(IST)  
Maintain Business Continuity with Cisco ASR 9000 nV Technology
It is a virtual chassis solution where a pair of ASR 9000 routers acts as a single device by maintaining a single contr...read more
Simplify Your Network with Cisco ASR 9000 nV Technology
With the new Cisco Network Virtualization (nV) technology in the Cisco ASR 9000 Series Aggregation Services Routers, se...read more
Cisco Small Cell Solution: Reduce Costs, Improve Coverage
It is designed to address the challenge of mobile service coverage and to expand network capacity...read more