(Updates with sales in fifth paragraph.)
Oct. 6 (Bloomberg) -- HTC Corp., the Taiwanese smartphone maker locked in a patent battle with Apple Inc., posted record profit as expansion in emerging markets such as China continues to drive demand.
Third-quarter net income climbed 68 percent to NT$18.6 billion ($608 million), the Taoyuan, Taiwan-based company said in a statement today. The average of 17 analysts’ estimates compiled by Bloomberg was for profit of NT$18.1 billion.
New models in China and continued growth in demand for handsets that use Google Inc.’s Android system pushed HTC to its sixth consecutive quarter of record sales. The acquisition of headphone brand Beats and the adoption of an updated version of Microsoft Corp.’s mobile platform may help HTC maintain momentum as it faces competition from Apple’s new iPhone 4S.
“HTC’s upcoming new devices will showcase HTC’s capability as the leading smartphone vendor and help HTC sustain its volume until the year-end,” Jeff Pu, who rates the stock “buy” at Fubon Financial Holding Co., wrote in a Sept. 21 report.
Revenue climbed 79 percent from a year earlier to NT$135.8 billion, HTC said. That’s worse than its own July 29 guidance for sales of about NT$137 billion, and the NT$137.4 billion average of 21 analysts’ estimates compiled by Bloomberg. Revenue may climb to NT$152.9 billion this quarter, according to the average of 19 analyst estimates.
That’s the first time in four quarters revenue missed Analysts’ expectations. Chief Financial Officer Winston Yung didn’t immediately answer calls to his mobile phone today. The company didn’t provide shipment data or explain the earnings.
HTC rose 1.6 percent to NT$687 at the 1:30 p.m. close in Taipei trading before the announcement. The stock has declined 20 percent this year compared with the 21 percent slide in Taiwan’s benchmark Taiex index.
HTC on July 21 announced HTC Weike, a handset that integrates Sina Corp.’s Twitter-like Chinese Weibo microblogging service that has more than 140 million users, as part of plans to expand into the world’s largest mobile-phone market. Sales in China will rise rapidly this quarter as it increases its product offering there, HTC’s president of North Asia Jack Tong said on Oct. 3, without providing details.
Its $300 million acquisition of a 51 percent stake in Beats Electronics LLC, backed by rapper Dr Dre, gives it new technology that will be incorporated in products from this quarter, it said Aug. 11. HTC Titan and HTC Radar, models using Microsoft’s new Windows Phone system called Mango, will begin selling in Europe and Asia from October, it said Sept. 1.
Apple, the world’s largest supplier of smartphones, on Oct. 4 announced iPhone 4S, a new handset with a faster processor and better camera than previous iPhone models. The Cupertino, California-based company is currently suing HTC alleging patent infringement, which the Taiwanese company has denied.
HTC will hold an investors’ conference by the end of the month to announce third-quarter shipments and provide fourth- quarter guidance.
--Editors: Suresh Seshadri, Anand Krishnamoorthy.
To contact the reporter on this story: Tim Culpan in Taipei at firstname.lastname@example.org.
To contact the editor responsible for this story: Young-Sam Cho at email@example.com.