HTC Drops to Decade Low After Cutting Quarterly Forecast

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HTC Corp. fell to the lowest in a decade in Taipei after the smartphone maker cut its sales forecast as much as 35 percent and announced plans to write off NT$2.9 billion ($94 million) of impaired assets.

Shares fell 9.9 percent, the daily limit, to NT$83.60, the lowest since May 2005. Taiwan’s benchmark Taiex gained 0.3 percent.

Slower demand for high-end smartphones and weaker sales in China prompted the Taiwanese company to forecast second-quarter revenue of as low as NT$33 billion, compared with an April 28 forecast for NT$46 billion to NT$51 billion. The lower sales and writedown mean HTC will post a loss for the current quarter, it said.

“The magnitude and timing should disappoint the market and deepen investors’ concerns over rapidly deteriorating fundamentals and management credibility,” Jasmine Lu, an analyst at Morgan Stanley, wrote in a June 7 report, cutting her share price forecast by 46 percent to NT$57.

Net loss per share will be NT$9.70 to NT$9.94, HTC said, compared with analyst estimates for earnings of NT$0.347 per share prior to the forecast cut.

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