FSC says it will look into HTC’s cut in its 2nd quarter forecast
The Financial Supervisory Commission (FSC, ), the top financial regulator in Taiwan, will launch an investigation into HTC Corp. ( ) after the smartphone maker unexpectedly cut its sales forecast for the second quarter.
FSC Chairman Tseng Mingchung ( ) said Monday that he has asked the Taiwan Stock Exchange to determine whether HTC was aware that it might post a net loss of nearly NT$10 ( US$0.32) per share in the current quarter when the company held its annual shareholders meeting on June 2.
Companies issue forecasts voluntarily and HTC’s release of a new forecast on June 5 did not pose any procedural problems, Tseng said on the sidelines of a meeting of the Legislature’s Finance Committee.
But the Taiwan Stock Exchange will still check the work sheets reported by HTC to see why the company did not reveal its reduced sales forecast to its shareholders June 2, Tseng said.
The FSC chief said that HTC remains “a highly respectable brand.”
the FSC’s investigation, HTC said that all updates to its financial forecasts are issued in line with standard procedures.
HTC shares fell by the daily maximum 10 percent to close at NT$83.6 in Taipei trading Monday, the first trading day after the company said June 5 that it had lowered its secondquarter sales forecast to NT$33 billion-NT$36 billion from its previous estimate of NT$ 46 billion- NT$ 51 billion made April 28.
The Taiwanese phone vendor also said it expects a net loss of NT$ 9.7- NT$ 9.94 per share for the April-June period, a revision from an earlier forecast of earnings of NT$0.06-NT$0.34 per share, citing lower- than- expected global demand for high- end Android devices and the company’s weak sales in China.
Despite the move to cut its second quarter guidance, HTC Chairwoman and CEO Cher Wang ( ) said in a statement that her company remained determined to strengthen its competitiveness in the global world smartphone market, cut operating costs and raise operational efficiency.