Taiwan's HTC expects 30 percent sales plunge in 1Q

Feb 06, 2012
Taiwan's leading smartphone maker HTC forecast Monday that its revenue in the three months to March may plunge 30 percent from a year ago, as competitors Apple and Samsung take their grip on the market.

Taiwan's leading smartphone maker HTC forecast Monday that its revenue in the three months to March may plunge 30 percent from a year ago, as competitors Apple and Samsung take their grip on the market.

But the company said the anticipated poor performance, extended from the , should bottom off following the release of new products.

In a statement released at the quarterly , the company said its first will likely fall 33 percent-38 percent to Tw$65 billion-Tw$70 billion, down from Tw$104.16 billion ($3.43 billion) a year ago.

Its gross profit margin is expected to drop to 25 percent from 29.3 percent the previous year, while its operating profit margin would likely plunge to 7.5 percent from 15.8 percent a year earlier.

Despite the worse-than-expected forecast figures, the company insisted the performance would not last long.

"These margins are a temporary phenomenon and will normalize when product cycle transition is over," the company said in the statement.

The company's in the three months to December dived to Tw$10.94 billion, down from Tw$18.6 billion in the previous quarter.

"While short term performance may not meet the results as expected, we have gained further experience and advancement in the areas of brand management and product innovation," HTC Chief Executive Peter Chou said.

For the full year of 2011, the company's net profit came in at Tw$61.98 billion, up 56.77 percent year-on-year while revenue rose 67.09 percent year-on-year to TW$465.79 billion.

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