HTC Corp in Q2 2012 ...
HTC Corporation (2498.TW) closed today on the Taiwan Stock Exchange at NT$240 ($8.01 USD), down 81% from its record high of NT$1238 ($42.08 USD) recorded 15 months ago on April 25, 2011. It is now at a 4 year low.
The official HTC Corp 2Q Business Review slides from their earnings CC are here ...
mzcan.com
Like Samsung and several OEMs HTC no longer provides handset unit sell-in. IDC credited them with 8.8 million units sold-in in Q2 for 5.7% of the smartphone market down from 11.6 million units and 10.7% share in the year ago quarter. They have only ~2% of total global handset sell-in.
HTC forecast Aug. 3 that third quarter revenue would total between NT$70 billion and NT$80 billion, a decline of 12 to 23 percent from the second quarter with operating margins to fall from 15 percent in 2011 to 7.7 percent in 2012 given falling product prices and a change in its product mix.
On top of their Q3 earnings warning on Friday HTC announced yesterday that its sales fell by double digits in July from the previous month, in line with the company's forecast of a weak third quarter. The Taoyuan-based manufacturer had consolidated revenue of NT$25.03 billion (US$836 million) in July, down 17 percent from June and down 45 percent from a year earlier.
>> HTC faces biggest revenue drop since 2002
Issues results warning for third quarter, as it struggles in the high end market and Europe
Caroline Gabriel
Rethink Wireless
6 August, 2012
rethink-wireless.com
HTC continues to struggle in the shadow of Apple and Samsung, and has issued a results warning which is becoming almost routine. With analysts only just collating the smartphone league tables for Q2, the Taiwanese firm said its third quarter revenue would be between TWD70bn ($2.3bn) and TWD80bn, sharply down from TWD135.82bn in the year-ago period.
That means HTC will miss analyst estimates for the fifth quarter in a row, while operating margin will be around 7%, compared with 14.86% in the prior year. The midpoint of its revenue forecast would be 45% down on the year-ago period, its biggest drop since 2002. The company said that it "continues to optimize organizational structure and resources to increase efficiency and competitiveness, focusing on key growth areas". In Q2, HTC had reported net profit of TWD7.4bn, down from TWD17.52bn a year ago, on revenue of TWD91bn.
The delayed shipment of some products to the US, amid legal battles with Apple, was cited as a factor, as well as weakness in Europe, where HTC had made significant progress from 2010. Unlike some rivals, including Apple, HTC is bearing up well in China, where local brands are on the march. HTC said that, in Q2, "Asia regional sales met expectations since the One family launched in Q2" and that in the rest of the year, "with growing brand awareness, strong operator partnerships and increasing retail presence, China is well positioned to become a key growth driver".
However, HTC is pulling back from some other areas. Like others before it, is appears to have been driven out of Korea by the native power of Samsung and LG, and is also reducing its presence in Brazil and closing an R&D center in North Carolina, USA.
"They're going to face a lot of pressure because their high end models are facing a lot of competition," Aaron Jeng, an analyst at Nomura Holdings, told Bloomberg. "HTC's top line sales are declining so they need to cut expenses to help improve their bottom line profit."
HTC's share of the global smartphone market dropped to 4.5% in the first quarter from a peak of 10.7% in the second quarter of 2011. However, IDC rates its performance somewhat better in Q2, at 5.7%. ###
- Eric - |
