HTC expects first-quarter revenue to drop 33-38%

February 6 news, according to Reuters, HTC on Monday said that the first quarter revenue is expected to be between 70-70 billion Taiwan dollars, down 33-38% year on year, well below the market expected 89.64 billion. The main reason is that due to the poor operation performance of the new and old models, HTC stated that the current difficulties are short-term.

HTC forecast for the first quarter:

- Gross margin is around 25%, down from 27.12% in the previous quarter

-- The estimated net operating rate is about 7.5%, down from 12.71% in the previous quarter.

HTC stated in a statement that short-term operations are still challenging, and it is expected that the profit rate will begin to return to normal when the new product transition period ends.

The statement stated that “Despite the short-term difficulties, the company will resume its growth momentum in the upcoming product cycle driven by brand strength, innovation and design capabilities.” HTC did not elaborate in the statement. However, it will hold a briefing later today.

In terms of shipments, HTC is the fifth-largest smartphone manufacturer in the world. As its mobile phone products are difficult to compete with Apple's iPhone and Samsung Galaxy series phones, the company’s fourth-quarter results were lower than market expectations, and its after-tax net profit was NT$11,017 million, a decline of 25.6% year-on-year, and far below the market’s expected NTD 13.33 billion. It was also the first time in two years that the company’s net profit fell. HTC’s revenue for the fourth quarter was NT$10,141 million, a decrease of 2.49% from the same period last year.

The research firm Strategy Analytics pointed out that in the fourth quarter of last year, American Apple Inc. replaced Samsung Electronics as the world’s largest smartphone manufacturer. Apple sold 37 million units, while Samsung Electronics sold 36.5 million units. The market share of the two companies was 23.9% and 23.5% respectively.

HTC fell 5.16% today to TWD 550; the weighted stock price index. TWII closed down 0.69%.