Friday, November 2, 2007

HTC gross margin hits record high in 3Q on improved product mix and declining ODM business

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Wednesday 31 October 2007]

High Tech Computer (HTC) saw its gross margin hit a record high of 37.9% in the third quarter of 2007 on an improved product mix and declining ODM business, according to company CFO Hui-ming Cheng.

A higher than 30% on-year growth in non-ODM business and the launch of the HTC Touch and other PDA phones in the third quarter helped push up the gross margin, Cheng detailed.

Looking forward, revenues from non-ODM business are expected to grow another 40% on year in the fourth quarter, with the proportion of non-ODM business to account for over 90% of HTC total revenues, Cheng estimated.

Total revenues for the fourth quarter of 2007 are expected to grow 20% from the same period last year, Cheng added.

HTC also reported that it posted after-tax profits of NT$7.43 billion (US$229 million) in the third quarter of this year, up 10.8% on year. The third-quarter earnings translate into a net EPS (earnings per share) of NT$12.96.

For the first three quarters of 2007, after-tax profits increased by 6% on year, to reach NT$18.95 billion, which translate into a net EPS of NT$33.05, according to company data.

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