HTC cuts 4Q revenue forecast; shares plunge

In an unexpected announcement, Taiwanese handset maker HTC said that, given the conditions pertaining to the global economic crisis as well as competition with Apple, there will likely be little change in the company's fourth- quarter revenue from the last year figures.

The announcement came as a disappointment because HTC has previously projected that its revenue in the 2011 October-December quarter will witness a growth of between 20 percent and 30 percent. However, the company also added that it is hopeful that the revenue figures will show an improvement in the first half of next year.

HTC had already warned last month that it was witnessing a slow down in its fourth-quarter revenue due to weakened demand; and had predicted a figure of between NT$125billion and NT$135billion; vis-a-vis the previous quarter figures of NT$135.8billion.

The downward revision in the quarterly revenue forecast by HTC - which is the biggest smartphone seller in the US - resulted in a plunge in the company's shares to 6.9 percent to NT$526 in Taipei; marking the lowest level to which HTC's shares have fallen in the last 16 months.

The filing of the HTC statement about the fourth-quarter revenue forecast cut with the Taiwan Stock Exchange took the analysts as well as markets by surprise; with Pierre Ferragu's Sanford Bernstein saying in a note to clients that the new guidance by HTC is "at odds with recent discussions we have had with distribution channels, especially in Europe."