Alexa

HTC revenue may continue decline in first quarter: analysts

HTC revenue may continue decline in first quarter: analysts

Taipei, Jan. 9 (CNA) HTC Corp.'s revenue may continue to fall in the first quarter of 2012 after reporting worse-than-expected results for the final quarter of 2011, but the world's No. 4 smartphone maker could see sales start to improve in February, Swiss bank UBS said Monday. HTC reported on Jan. 6 that its fourth-quarter revenue fell 2.49 percent year-on-year to NT$101 billion (US$3.4 billion). That was below the company's forecast of NT$104 billion, which had already been cut deeply in November, and sent HTC shares plunging by 5.19 percent to NT$457 on Monday. UBS maintained a "buy" rating on HTC and a target price of NT$550, despite predicting that HTC's first-quarter sales could decline by 22.5 percent quarter-on-quarter due to a 20 percent decline in shipments. HTC's operating margin could drop to 9.2 percent from 12.8 percent in the fourth quarter of 2011, the bank added. UBS still expects HTC's monthly revenue to recover beginning in February, however, when its new products are expected to be launched at the Mobile World Congress in Spain on Feb. 27-March 1. "HTC plans to have fewer products in 2012. We think this could help concentrate marketing expenses more effectively," UBS analyst Arthur Hsieh said in a research note. "Moreover, having fewer Hero products could be easier to manage and help it target consumers effectively," he added. "We believe HTC should have developed some features to create meaningful differentiation, in addition to using the most advanced chipset solutions," he said. Credit Suisse maintained a "neutral" rating on HTC and lowered its target price from NT$680 to NT$600. It saw the first quarter of 2012 as a product transition period for HTC and predicted a 20-25 percent revenue decline from the fourth quarter. Credit Suisse said HTC's product pipeline should start to improve from March at the earliest, driven by new technologies such as single-chip LTE (long-term evolution), Nvidia's quad-core processors, and customized models for China. Bank of America Merrill Lynch also noted that HTC will reduce the number of smartphone models it sells and focus on two to three flagship models in 2012, which will help cut HTC's research and development costs and raise consumer awareness. It maintained a "neutral" rating and a target price of NT$570. Citigroup estimated that HTC's shipments in the first quarter could be around 8 million units, but the projected numbers could still be revised downward due to unstable shipment numbers. The bank cut its target price from NT$460 to NT$400 while maintaining a "sell" rating for the company. (By Jeffrey Wu)


Updated : 2021-02-28 18:28 GMT+08:00