HTC's Q3 smartphones sales shine, but company predicts tough Q4

HTC posted soaring revenue and smartphone shipments in the third quarter, but warned that its fourth quarter--traditionally handset makers' strongest--could see a drop-off in sales.

The company reported solid third-quarter results, but also pointed to an uncertain competitive environment as well as economic volatility, particularly in Europe, as concerns for the fourth quarter. The concerns about the European debt crisis echo those made earlier this month by Sony Ericsson CEO Bert Nordberg.

For the third quarter, HTC reported a net profit of $623.6 million, up 68 percent year-over-year. Total revenue clocked in at $4.53 billion, up 79 percent from the year-ago period. HTC shipped 13.2 million smartphones, up 93 percent from the year-ago quarter, and the company said its sales in China grew nine-fold from the same period last year. The company's average selling price edged up slightly to $344.

Despite the rosy results, HTC said uncertainty may lie ahead. The company expects fourth-quarter revenue to be between $4.17 and $4.51 billion, up 20 to 30 percent from a year earlier, but still below the third quarter's result. HTC said it expects to ship between 12 million and 13 million units in the fourth quarter. HTC is also facing off against Apple's (NASDAQ:AAPL) iPhone 4S, which was released earlier this month, a quarter later than typical iPhone launches.

HTC is trying to expand its presence in China, but analysts said HTC may find it tough to crack the crowded mobile market there. HTC said it is looking to retail low-cost smartphones priced between $200 and $250 in developing markets like China. HTC CFO Winston Yung said on a conference call that HTC is also expanding its retail presence in Brazil, India and Russia, but also said HTC will not compromise on its brand or its smartphone quality.

"We hope to capture the opportunities from customers migrating from feature phones to smartphones with our quality; that's something we won't compromise, we cannot launch low-end products," he said.

For more:
- see this release (PDF)
- see this Reuters article
- see this Dow Jones Newswires article
- see this ZDNet article

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