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HTC Earnings Soar, But Flat 4Q Ahead

Mon, 10/31/2011 - 8:14am
Maisie Ramsay

Taiwan handset maker HTC posted major gains in sales and profits for the third quarter but warned that its earnings could plateau in the fourth quarter on stagnant cell phone shipments.

Profits grew to $624 million on a 79 percent year-over-year jump in sales, which reached $4.53 billion. HTC has grown revenue for six consecutive quarters largely on the success of its popular Android-based smartphones.

Handset shipments posted marked increases, rising 93 percent over 2010 to 13.2 million units. The average selling price held steady at $344, less than a one percent increase over last year.

HTC warned that is winning streak could end next quarter on an expected decline in handset shipments. The company expects to sell between 12 million and 13 million phones during the fourth quarter. While that is an increase over last year, it marks a softening of demand from the third quarter. The tapering off of HTC's handset shipments will also hit sales, which are forecast to come in between $4.17 billion and $4.5 billion.

The fourth quarter is usually a strong period for handset manufacturers that get a boost from holiday sales. HTC did not provide details about its weak outlook, but the company is facing increased competitive pressure from the iPhone in the United States.

Sprint has been one of HTC's biggest U.S. smartphone customers, but the arrival of the iPhone could soften demand for HTC's Android devices. AT&T is including an HTC phone in its initial LTE device lineup, the Vivid.

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