HTC's Q4 profit drops nearly 26% as Samsung's profit soars

HTC posted a 25.5 percent drop in fourth-quarter profit after warning investors that the quarter would be weak, taking further shine off the Taiwanese smartphone maker. The decline was HTC's first quarterly profit drop in two years.

HTC reported net income in the quarter of $364 million, down from $489.5 million in the year-ago period and $617 million in the third quarter. The company also reported that sales in December dropped 20.3 percent to $872 million, echoing a similarly-sized drop in November sales.

In late November HTC shocked the market when it said it expected fourth-quarter sales to be the same as last year, around $3.4 billion, down from an earlier forecast of $4.1 billion to $4.43 billion. The company attributed the reduced forecast to the global economic crisis and increased competition from Apple (NASDAQ:AAPL) and Samsung.

In the aftermath, HTC tried to soothe investor concerns. HTC CFO Winston Yung said in November that the company plans to continue to attack the U.S. market as well as develop global models. Indeed, new models for the U.S. market are likely to be unveiled next week at the Consumer Electronics Show in Las Vegas, and HTC will likely use Mobile World Congress in February to unveil more global phones. Still, HTC has been under pressure from other companies in the increasingly crowded market for devices running Google's (NASDAQ:GOOG) Android platform and Microsoft's (NASDAQ:MSFT) Windows Phone.

As HTC falls, one of the companies that is on the rise is Samsung, which reported a 73 percent spike in operating profit for the fourth quarter, as profit rose to $4.5 billion. The company usually reports preliminary earnings ahead of more detailed breakdowns. Analysts expect Samsung to ship as many as 35 million smartphones in the fourth quarter, which would be a 25 percent jump from the third quarter, when it shipped 27.8 million smartphones, according to research firm Strategy Analytics.

Samsung has benefited strongly from sales of its Android phones, and its Galaxy line of products in particular. Some analysts even think that Samsung, which shipped more than 300 million handsets last year, could challenge industry leader Nokia (NYSE:NOK) for the top spot in terms of overall handset shipment volumes. 

For more:
- see this Bloomberg article
- see this Reuters article
- see this The Verge article
- see this separate Bloomberg article
- see this separate Reuters article

Related Articles:
HTC reassures market after cutting its Q4 revenue forecast
HTC cuts revenue forecast, re-evaluates $300M purchase of S3 Graphics
HTC's Q3 smartphones sales shine, but company predicts tough Q4
Analysts: Samsung primed for record smartphone shipments in Q4
Samsung surpasses 300M handset sales for first time in 2011

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