Is HTC’s Smartphone Outlook a Harbinger or Anomaly?

Taiwanese smartphone maker HTC announced strong Q3 numbers along with pessimistic guidance for Q4. Profits increased 68% on the back of unit shipments that doubled over last year. Chinese shipments were in fact nine times last year.

Sales were more than 13 million devices and totaled $4.54 billion, generating earnings of $625 million (73 cents a share). Sales and unit numbers were slightly short of HTC’s July guidance.

The company projects revenues of $4.18-4.51 billion for Q4 and unit shipments from 12 million to 13 million. The fact that the company expects to ship less in the following quarter, a holiday season, is a matter for concern. Analysts are wondering whether this soft guidance is a pointer to a looming slowdown in smartphone demand in the Western countries.

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HTC’s outlook follows Apple’s (NASDAQ:AAPL) disappointing iPhone numbers in Q3. AT&T (NYSE:T) and Verizon (NYSE:VZ) both reported declines in sales of smartphones on a quarter to quarter basis in Q3. Analysts have also lowered royalty estimates for Qualcomm (NASDAQ:QCOM) due to lower smartphone sales forecasts in the Western markets.

  • Apple Inc. (NASDAQ:AAPL): The shares recently traded at $408.27, up $3.32, or 0.82%. Its market capitalization is $379.40 billion. They have traded in a 52-week range of $297.76 to $426.70. Volume today was 3,933,109 shares versus a 3-month average volume of 22,782,600 shares. The company’s trailing P/E is 14.75, while trailing earnings are $27.68 per share. About the company: Apple Inc. designs, manufactures, and markets personal computers and related personal computing and mobile communication devices along with a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers.
  • AT&T, Inc. (NYSE:T): The shares recently traded at $29.46, down $0.28, or 0.94%. Its market capitalization is $174.55 billion. They have traded in a 52-week range of $27.20 to $31.94. Volume today was 3,557,715 shares versus a 3-month average volume of 35,284,500 shares. The company’s trailing P/E is 14.90, while trailing earnings are $1.98 per share. The company pays a dividend of $1.72 per share for a dividend yield of 5.80%. About the company: AT&T Inc. is a communications holding company. The Company, through its subsidiaries and affiliates, provides local and long-distance phone service, wireless and data communications, Internet access and messaging, IP-based and satellite television, security services, telecommunications equipment, and directory advertising and publishing.
  • Verizon Communications Inc. (NYSE:VZ): The shares recently traded at $37.27, down $0.36, or 0.96%. Its market capitalization is $105.51 billion. They have traded in a 52-week range of $31.60 to $38.95. Volume today was 2,028,017 shares versus a 3-month average volume of 19,650,900 shares. The company’s trailing P/E is 14.99, while trailing earnings are $2.49 per share. The company pays a dividend of $2.00 per share for a dividend yield of 5.30%. About the company: Verizon Communications Inc. is an integrated telecommunications company that provides wire line voice and data services, wireless services, Internet services, and published directory information. The Company also provides network services for the federal government including business phone lines, data services, telecommunications equipment and payphones.
  • QUALCOMM Incorporated (NASDAQ:QCOM): The shares recently traded at $52.15, down $1.08, or 2.03%. Its market capitalization is $87.61 billion. They have traded in a 52-week range of $44.55 to $59.84. Volume today was 3,710,556 shares versus a 3-month average volume of 17,464,000 shares. The company’s trailing P/E is 21.37, while trailing earnings are $2.44 per share. The company pays a dividend of $0.86 per share for a dividend yield of 1.60%. About the company: QUALCOMM, Inc. develops and manufactures digital wireless communications equipment. The Company licenses its Code Division Multiple Access (CDMA) intellectual property to other companies, and produces CDMA-based integrated circuits; equipment and software used to track workers and assets; software for wireless content enablement; and offers services to deliver multimedia content.

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