HTC Slumps to 2-Year Low After Profit Drops: Taipei Mover
HTC Corp. (2498), Asia’s second-largest smartphone maker, fell to its lowest in more than two years in Taipei trading after posting its third consecutive profit decline.
The shares lost 5.6 percent to NT$304 at the close of trading in Taipei, the lowest since March 2010. The stock was the second-largest contributor to a 0.8 percent drop in the benchmark Taiex (TWSE) index.
Second-quarter net income fell 58 percent to NT$7.4 billion ($247 million), the Taoyuan, Taiwan-based company reported July 6 after cutting its revenue guidance by 13 percent a month earlier. HTC will face competition in the second half from new models by Samsung Electronics Co. (005930) and Apple Inc.
“We do not see any turnaround opportunities for HTC” in the second half, Laura Chen, a Taipei-based analyst at BNP Paribas SA, wrote in report today. “We see risk on potential product delays and competitors’ aggressive new product push, such as new Galaxy note and iPhone 5,” wrote Chen, who has a reduce rating on the stock.
Third-quarter revenue will probably drop by 27 percent to NT$96.5 billion, according to the average of 10 analyst estimates compiled by Bloomberg since HTC cut its second-quarter guidance on June 6.
HTC is rated sell by 21 of 37 analysts surveyed by Bloomberg, while four recommend buying the stock.
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