* Cut Q2 sales target by 13.3 pct
* Business in China better than expected
By Clare Jim
TAIPEI, June 6 Taiwanese smartphone maker HTC
Corp cut its second-quarter revenue target, citing
lower-than-anticipated sales to Europe and delayed product sales
in the United States, while China is doing better-than-expected,
The world's No.5 smartphone vendor suffered a rapid fall
from grace in the second half of last year as its phones failed
to keep up with Apple's iPhones and Samsung's
Galaxy range, after sales had grown four-fold and
shares more than tripled in the 1-1/2 years since 2010.
It cut its second-quarter revenue target by 13.3 percent on
"A bigger softness is from Europe than the U.S.," chief
financial officer Chia-Lin Chang told an analyst telephone
conference, blaming the macroeconomic situation and intensified
competition in that region.
In the U.S., HTC experienced a delay in sales of two new
smartphones, the HTC One X and HTC EVO 4G LTE, for around two
weeks last month due to a requirement for customs inspections
after losing a patent dispute with Apple.
"But sales in China are better than we thought; we expect
China will contribute a representative percentage to the revenue
this quarter," Chang added.
HTC cut its second-quarter revenue target to T$91 billion
($3.03 billion) from T$105 billion, compared to T$67.79 billion
in the first quarter. It also revised down its operating margin
forecast by 2 percentage points to 9 percent, but kept gross
margin at 27 percent.
The revision includes a one-time charge of T$2.6 billion to
facilitate the clearance of inventory for certain products
shipped from last year, an HTC statement showed. Without the
charge, the revenue would have been T$93.6 billion.
"Given all the things happening in the second quarter here,
we certainly hope we can get the right guidance and have a more
smooth transition going forward," Chang said.
But analysts said the cut in forecast overshadowed the
outlook for the second half of the year for both HTC and the
"If the reason is more because of the macro concern, then
it's not in the control of the company, no matter how good its
products are," said Bonnie Chang, an analyst from Yuanta
Securities. "It can even affect the business of Apple."
HTC's consolidated sales for May were T$30 billion, down
26.13 percent from the same month a year earlier.
HTC reported a 70 percent tumble in net profit in the first
quarter to T$4.464 billion ($151.5 million), just below