HTC shares fall 6 p.c. after CFO change

TAIPEI, TAIWAN: Shares of HTC Corp fell as much as 6 per cent on Tuesday after a change in its chief financial officer and the imminent launch of a new phone by arch rival Samsung Electronics raised concerns over the Taiwanese firm's recovery.

HTC has been losing market share to Samsung and Apple Inc in the cut-throat smartphone market as its products failed to excite consumers, and its results have lagged forecasts since the fourth quarter of last year.

Also read: Samsung to unveil new Galaxy S smartphone on May 3

"When a company changes its CFO, it often indicates that the company's operations or financials have reached a bottleneck," said Tom Tang, a vice president at Masterlink Investment Advisory in Taipei.

HTC said in a statement on Monday it had appointed Chia-Lin Chang, a former partner at Goldman Sachs in Taiwan who has also worked as an engineer at Motorola, as new chief financial officer, replacing Winston Yung.

The company did not give reason for the change. Yung will take up a new role in corporate development, HTC said.

Former contract maker HTC had a fairytale ride in 2010 and early 2011, when its shares more than tripled in the 14 months to April 2011 and sales grew four-fold in 1-1/2 years as consumers snapped up its innovative phones with their distinctive large clock numerals.

But it suffered an equally rapid fall from grace as its phones failed to keep up with Apple's iPhones and Samsung's Galaxy range. It shocked investors in November by slashing its earnings forecast, and its stock ended up as the worst performer among global smartphone companies last year, down 42 per cent.

The world's No.5 smartphone maker reported a 70 per cent tumble in net profit in the first quarter to T$4.464 billion ($152 million), just below forecasts. It will hold a briefing for investors on its first-quarter results on April 24.

HTC now faces another challenge after the earlier than expected roll-out of Samsung's third-generation flagship smartphone Galaxy S, which will leave HTC less opportunity to claw back market share.

Earlier this month, HTC launched its new One series of models with fast graphic chips and advanced music and photography functions in the market, banking on them to regain its market share. The series has received generally positive reviews from analysts and tech bloggers.

However sales of HTC's One X and S products have not increased meaningfully in Western Europe since its launch, noted Pacific Crest analyst James Faucette in a report on Monday.

At 11:58 p.m. Eastern Time, HTC traded down 5.5 per cent at $488.50, versus the broader market's 1.28 per cent fall.