By Lorraine Luk, Dow Jones Newswires
Tuesday 03 May 2011
Taiwanese mobile phone maker sees ongoing strong consumer demand in second quarter.
Taiwan handset maker HTC Corp. said Friday it expects its second-quarter revenue to rise 97% from a year earlier to NT$120 billion (US$4.17 billion), driven by strong growth in smartphone shipments.
The company said consumer demand and inventory will likely remain healthy in the second quarter, adding the March 11 earthquake in Japan won't impact its operations in the three months ending June 30 because it has sufficient inventory for components and its executives are working to secure supplies from Japan.
HTC's strong second-quarter forecast reflects rising demand for smartphones as consumers continue to switch from traditional cellphones to more sophisticated smartphones that allow them to browse the Internet, write emails and watch videos. HTC's overseas sales have been boosted by its early adoption of the Android platform for mobile phones.
Click here to find out more!HTC said it expects a second-quarter gross profit margin of between 28.5% and 29.5%, steady from 29.3% in the first quarter.
The Taoyuan-based company said it expects second-quarter smartphone shipments to rise by between 103% and 113% to 11 million-11.5 million units, and its second-quarter operating margin to be between 15% and 16%.
Chief Financial Officer Winston Yung said the company is investing NT$2.8 billion to build a new plant in Taoyuan and US$64 million to increase its production capacity in China to meet strong demand for smartphones, but didn't provide a time frame.
He said HTC also plans to add 1,000 staff to expand its research and development capacity as it is expanding into the fast-growing but increasingly crowded tablet market.
Analysts said the company's second-quarter forecasts were in line with market expectations, adding they expect HTC's strong growth momentum to continue in the remaining months of the year.
Apart from strong demand for fourth-generation smartphones in the U.S., Yuanta analyst Bonnie Chang said HTC will introduce more low-end and mid-end HTC-brand smartphones from the second quarter, which will help fuel the company's growth this year.
HTC said earlier this month its first-quarter net profit almost tripled to a record NT$14.83 billion from NT$5.00 billion a year earlier, as it shipped 9.7 million units in the period, almost triple the 3.3 million units shipped a year earlier.
The company said there was strong customer demand for the products it launched in the first quarter, which included the Inspire 4G, Thunderbolt, EVO Shift 4G, Desire S and Incredible S.
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