Taipei - Taiwanese smartphone maker HTC expects revenue
to be flat to 17% lower in the first quarter compared with the previous three
months, worse than forecast, while margins are also seen holding steady or
The former contract manufacturer's fortunes have been
declining sharply since the second half of 2011, as the growing dominance of
Apple's iPhone and Samsung's Galaxy range quickly deflated the success of its
own brand's rapid rise.
HTC said on Monday that it expects first-quarter revenue of
T$50bn to T$60bn. That compares with T$60bn in the fourth quarter and T$65.75bn
a year ago.
Analysts have forecast HTC would earn revenue of T$62.77bn
for the quarter, according to the average projection of 18 analysts polled by
Thomson Reuters I/B/E/S.
HTC also said it expects a first-quarter gross margin of
about 21% to 23%, flat to lower from 23% in the prior quarter, and an operating
margin of 0.5% to 1.0%, also flat to lower from 1%.
The weaker-than-expected first-quarter revenue outlook
follows a 91% year-on-year slide in the Taiwanese company's net profit in the
fourth quarter that fell short of analyst forecasts.
Analysts doubt that 2013 will be a turnaround year for HTC
as the strength of its brand lags far behind Apple and Samsung.
But some have said that the next version of its flagship
smartphone, code-named "M7" and which they expect to be launched in
the middle of this month in New York and London, could give the company a
first-mover advantage of a few months on features such as higher-resolution
Samsung, the world's top smartphone maker, said
last month that it expected the global smartphone market to shrink in the first
quarter from the seasonally strong fourth quarter, while the overall handset
market would see growth at a mid single-digit percentage rate this year from
2012, with the smartphone segment set to slow.
Strong smartphone sales powered an 89% increase in operating
profit at the Korean company in the October-December quarter to a record
Cupertino, California-based Apple, which faces intense
competition from Samsung, sparked a slide in its share price late last month
when it forecast lower revenue of $41bn to $43bn in its current fiscal quarter,
down from $54.5bn in the previous quarter and below the average Wall Street
forecast of more than $45bn.
On Monday, shares of HTC fell 1.6%, versus a 0.9% rise in
broader market. HTC's shares have fallen more than 40% since the start of last
year, compared with a 12% rise in the Taiwan stock benchmark.