HTC Corp. warns of net loss for sec­ond quar­ter

The China Post - - LOCAL -

Tai­wan- based smart­phone ven­dor HTC Corp. has low­ered its fi­nan­cial fore­cast for the sec­ond quar­ter of this year, warn­ing that it could in­cur a net loss of al­most NT$10 (US$0.32) per share for the quar­ter.

The smart­phone ven­dor said that the re­vi­sion partly re­sulted from lower-than-ex­pected global de­mand for high-end An­droid de­vises, while the com­pany’s sales in the China mar­ket failed to meet ex­pec­ta­tions.

In ad­di­tion, af­ter a com­pre­hen­sive re­view of its as­sets based on cur­rent busi­ness con­di­tions and fu­ture op­er­a­tional needs, HTC said that it booked a one-time im­pair­ment of NT$2.9 bil­lion for idle as­sets and pre­paid ex­penses.

As a re­sult, HTC ex­pects that it will post a net loss of NT$9.70NT$9.94 per share for the April to June pe­riod, a re­vi­sion from an ear­lier fore­cast of only NT$0.06NT$0.34 losses per share.

It has also low­ered its sec­ond quar­ter sales fore­cast to NT$33 bil­lion- NT$ 36 bil­lion from the pre­vi­ous es­ti­mate of NT$ 46 bil­lion- NT$ 51 bil­lion, and cut the sec­ond quar­ter gross mar­gin fore­cast to 19-19.5 per­cent from 23-23.5 per­cent.

HTC said that the pre­paid ex­penses in­cluded into the one-time loss for the sec­ond quar­ter re­ferred to roy­alty pay­ments for use of video and au­dio ser­vices based on an agree­ment signed by the com­pany and a ser­vice provider.

The Tai­wanese smart­phone ven­dor said that since the sec­ond half of 2014, it out­sourced pro­duc­tion of part of its prod­ucts, which has led to a lower ca­pac­ity uti­liza­tion rate and more idle as­sets, which re­sulted in the sec­ond quar­ter’s as­set im­pair­ment loss.

De­spite the move to cut its sec­ond quar­ter guid­ance, Cher Wang, chair­woman and CEO of HTC, said that her com­pany re­mained determined to strengthen its com­pet­i­tive­ness in the global world smart­phone mar­ket, cut op­er­at­ing costs and raise ef­fi­ciency.

Wang said that HTC will stream­line its busi­ness op­er­a­tions, while de­vot­ing it­self to de­vel­op­ing prod­ucts be­yond smartphones for growth.

Shares of HTC have fallen to a new low since the com­pany launched a list­ing on the Tai­wan Stock Ex­change in March 2002 amid con­cerns over its ship­ments at a time when the com­pany faced fiercer-than-ever com­pe­ti­tion from its ri­vals not only in the high-end smart­phone mar­ket but also in the bud­get model busi­ness.

On Fri­day, the stock closed at NT$92.80, far be­hind a his­tor­i­cal high of NT$1,300 seen in late April 2011. So far this year, HTC shares have lost 34.6 per­cent.

In May, HTC posted NT$10.79 bil­lion on con­sol­i­dated sales, down 20 per­cent from a month ear­lier and down 48 per­cent from a year ear­lier. In the first five months of this year, its con­sol­i­dated sales fell 13 per­cent yearon-year to NT$65.9 bil­lion.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.