HTC's Q3 profit, revenue soar

Smartphone shipments nearly double as Taiwanese handset maker's third quarter earnings shoot up to record numbers. But HTC says fourth-quarter growth expected to be flat, if not negative.
Written by Jamie Yap, Contributor

HTC has reigned in impressive numbers for its third-quarter earnings report with a 68 percent jump in profits and 79 percent surge in revenue from the same quarter last year, thanks largely to smartphone sales in China. The Taiwanese handset maker's forecast for the fourth quarter, however, is less rosy with projected flat, if not negative, growth.

The company said Monday its 2011 third-quarter profit this year grew 68 percent year-on-year to hit almost NT$18.7 billion (US$625 million), while it earned a record-high quarterly revenue of NT$135.8 billion (US$4.5 billion), a 79 percent year-on-year gain. Total revenues expanded for the sixth consecutive quarter since the first-quarter 2010, it added in the statement.

HTC said it sold 13.2 million smartphones in the third quarter, nearly double or 93 percent more than the same period last year, and 9 percent more than the second quarter of 2011.

The strong performance was largely thanks to China, "one of the most important growth regions for HTC", the company said. The Chinese market saw top sales growth across all regions for the third quarter, increasing nine-fold in the same period last year.

Looking ahead, the fourth quarter outlook was less optimistic. HTC said revenue was expected to be between NT$125 billion (US$4.2 billion) and NT$135 billion (US$4.5 billion). Fourth-quarter shipments were also expected to remain flat, at about 12 million to 13 million.

Chief executive Peter Chou said: "We aim to lead the way as the smartphone market continues to expand and change rapidly. We pride ourselves on anticipating market and consumer needs, and addressing them before they are realized. We are growing rapidly and responsibly around the globe and continue to expand our leadership in new areas, such as LTE."

The world's No. 5 smartphone maker wants to "capture the opportunities from customers migrating from feature phones to smartphones with our quality", HTC CFO Winston Yung said at a telephone conference Monday, according to Reuters. "That's something we won't compromise, we cannot launch low-end products," he said.

The company added that it had no plans to launch models priced lower than US$100, and its smartphones for the mass market were currently priced between US$200 and US$250.

In the Reuters report, Gartner analyst Carolina Milanesi, however, noted that many of HTC's high-end phones were actually competing against each other. "They have many products really targeting a similar audience and this is never a good thing," Milanesi said. "Although I believe HTC is still the vendor that has made more progress in building a company experience around Android, I think they need to look at their portfolio very carefully and rationalize it."

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