HTC posts record-low quarterly profit after delayed phone launch
TAIPEI (Reuters) - HTC Corp reported a record-low quarterly profit on Monday that missed analysts' estimates after it delayed the full launch of its 2013 flagship smartphone model, which will now debut against Samsung Electronics' newest Galaxy.
A shortage of cameras meant HTC managed to introduce its latest HTC One phone in just three markets by the end of the first quarter instead of the planned 80. It does not expect to kick off sales across Europe, North America and the Asia-Pacific region before the end of April.
Samsung Electronics Co Ltd (005930.KS) has said its Galaxy S4 will be available in 155 countries by the end of April.
HTC said its unaudited net profit was T$85 million in its January-March first quarter, compared with T$1 billion in the prior quarter and T$10.9 billion in the same period last year. It was the lowest since HTC began reporting quarterly profits in 2004.
The Taiwanese smartphone maker was expected to post a net profit of T$467.5 million, according to the average forecast of 18 analysts polled by Thomson Reuters I/B/E/S.
First-quarter revenue was T$42.8 billion, lower than the T$50-60 billion range that HTC had forecast in February. Revenue in the fourth quarter was T$60 billion.
"As HTC failed to establish its brand image by selling its most important flagship phone on time, it'll be very difficult to push on the mid- and low-end phones when HTC launches them in Q3-Q4," said Dennis Chan, an analyst with Yuanta Securities in Taipei. "Sales in the second quarter will bounce, but they will lose momentum again in Q3-Q4."
GRAPHIC: HTC earnings link.reuters.com/gas27t
The company has partnered with Facebook Inc (FB.O), which unveiled new software last week called "Home" that replaces the home screen on some Android smartphones, and introduced a $100 HTC-made handset that is pre-installed with the new app.
"The Facebook phone is not enough to turn HTC around," said Daiwa analyst Birdy Lu, speaking before HTC's results were released. "Facebook Home could be only good for Facebook addicts, and the distribution channel for HTC First is very limited. HTC's 2013 performance is still highly dependant on HTC One."
HTC was the world's 10th-biggest smartphone maker by shipments in the fourth quarter, according to IT research firm Gartner, jostling in a crowded field behind the top-two heavyweights Samsung and Apple Inc (AAPL.O).
Shares of HTC have lost more than half of their value in the past 12 months, underperforming a slight rise in Taiwan's main TAIEX index.
On Monday, HTC shares closed down 2.2 percent before the earnings were released, compared with a 2.4 percent fall in the main index. (Reporting by Clare Jim; Editing by Chris Gallagher and Emily Kaiser)
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