TAIPEI Aug 6 Shares of HTC (2498.TW) plunged by
their daily limit for a second straight session to an almost
four-year low on Tuesday, after the Taiwanese smartphone maker's
forecast for a slide in quarterly revenue led to a raft of
The world's No.5 smartphone maker, once one of the
industry's high flyers but badly hit by competition from Apple
Inc (AAPL.O) and Samsung (005930.KS), on Friday forecast as much
as a 23 percent fall in third-quarter revenue, much worse than
analysts' forecasts. [ID:nL4E8IU0ZL]
"There are some views that HTC may post a loss in as early
as the fourth quarter this year," said Michael On, managing
director of Beyond Asset Management.
"Its future is not looking good. It can't compete with
Samsung. Even when its share price was at its last lows the
company was at least still making a profit."
Shares of HTC had shed 7 percent to T$240.50, their lowest
since November 2008, as of 0120 GMT. The broader market .TWII
was up about 0.2 percent.
HTC, formerly a contract maker, had a fairytale ride in 2010
and early 2011, when its shares more than tripled in the 14
months to April 2011, reaching T$1,238.10. The company's sales
grew four-fold in 1-1/2 years as consumers snapped up its
innovative phones with their distinctive large clock numerals.
But it suffered an equally rapid fall from grace as its
phones failed to keep up with Apple's iPhones and Samsung's
HTC sees third-quarter revenue at between T$70 billion and
T$80 billion ($2.3 billion and $2.7 billion). That compares with
T$91 billion in the second quarter, and analysts' average
estimate of T$92.51 billion in a Thomson Reuters poll.
HTC's grim outlook further disappointed analysts after the
company posted another forecast-lagging second-quarter result
last month, and many downgraded the company to "sell".
Sanford Bernstein analyst Pierre Ferragu, who has been a
believer in the Taiwanese company but joined the latest wave of
downgrades, and cut it to 'market perform'. Ferragu noted the
increasing challenges the company will face from Apple and
Samsung, and said its lack of brand visibility will further
drive down its share price and gross margin.
Further enhancing its brand to compete with Apple and
Samsung is vital for HTC, many analysts say.
"The HTC x one is a very good product, but consumers are
ignoring it over Samsung’s Galaxy S3 because of the brand," said
Gartner analyst Carolina Milanesi, who based in California.
"I feel like they have to step up their game, they cannot
afford to operate the way they did four years ago when they were
the new kid on the block. It is almost like a kid going to
junior high to college and still playing around as it was a
($1 = 6.3794 Chinese yuan)
(Reporting by Clare Jim; Additional reporting by Tarmo Virki in
Helsinki; Editing by Chris Gallagher)
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Keywords: HTC SHARES/
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