HTC Profit Explode due to Android Phone Sales

 

By ARIES POON

TAIPEI—Taiwanese smartphone maker HTC Corp. saw its fourth-quarter unaudited net profit more than double from a year earlier, driven by strong growth in handset shipments.

HTC, the world's largest maker of phones using Microsoft Corp.'s operating system, is also becoming a major seller of devices that use Google Inc.'s rival Android software, which is growing in popularity. The company's strong results in general reflect rising demand for smartphones as consumers continue to switch from traditional cellphones to gadgets that allow them to browse the Internet, write emails and watch video.

HTC said ts net profit surged to 14.59 billion New Taiwan dollars (US$499 million) from NT$5.53 billion a year earlier. Revenue more than doubled to NT$104.01 billion from NT$41.07 billion.

The Taiwanese company didn't elaborate on its results, but analysts had expected robust global demand for smartphones to boost HTC's earnings in the fourth quarter and beyond.

Steven Tseng, an analyst at Royal Bank of Scotland, said the results were solid and in line with his expectations. "Android-based phones will continue to be a driver for HTC this year," he said, adding HTC's switch to chipsets that have better multimedia performance but lower prices boosted the company's profitability last quarter.

Tseng said HTC's first shipment of fourth-generation mobile phones using what's known as Long-Term Evolution technology may take place as soon as the second quarter, which will further boost the company's earnings this year. LTE promises faster data downloads compared with existing third-generation wireless technology.

"A bigger-than-expected underlying market size combined with continued strength in Android smartphones, should benefit key players such as HTC," Credit Suisse said in a research report Tuesday. "We believe Android momentum remains strong... we might be still underestimating its growth potential."

According to a survey from technology-tracking firm comScore Inc., more Americans say for the first time they are using cellphones powered by Google's Android system rather than Apple Inc.'s iPhone. Other estimates, like those from market-research firm NPD Group, have shown Android devices outselling iPhones, or moving ahead among consumers only.

For the full-year, HTC's unaudited net profit rose 74% to NT$39.33 billion from NT$22.61 billion a year earlier. Unaudited revenue last year rose 93% to NT$278.76 billion from NT$144.49 billion.