By Clare Jim
TAIPEI (Reuters) - Taiwan smartphone maker HTC Corp saw its net profit double in the second quarter, beating market expectations and boosted by surging customer demand for its high-tech gadgets.
The world's No.5 handset maker posted second-quarter profit of T$17.52 billion ($608.44 million), compared to T$8.64 billion a year earlier, it said in a statement on Wednesday. It did not give further details.
"The second-quarter result was pretty solid. Now the market will wait to see if the guidance for the third quarter can also beat the street expectation, which is a 5-15 percent month-month growth in sales," said Yuanta Securities analyst Bonnie Chang.
HTC will hold a briefing on the second-quarter results and give third-quarter guidance on July 29.
A poll by Thomson Reuters I/B/E/S of 10 analysts had yielded a median forecast for a T$16.53 billion in profit.
Chang believed the better-than-consensus result was based on
upside from non-operating income such as interest income and foreign exchange gains, while operating income was not expected to contain big surprises.
Separately, HTC said on Wednesday that it plans to buy S3 Graphics for $300 million from Via Technologies, a move to enhance its market position by strengthening the company's graphic technology. The acquisition extends its IP portfolio with the addition of 235 patents and pending applications, including those related to graphics visualization technologies.
S3 Graphics, which is also owned by HTC's chairwoman, Cher Wang, won a patent case against Apple Inc early this month.
HTC shares closed up 3.3 percent at T$1,095 on Wednesday ahead of the earnings announcement, outperforming the 0.46 percent rise in the main share index.
Shares of the Taiwanese smartphone maker have dropped 15 percent since June 7, triggered by its removal from Goldman Sachs's conviction list on a potential downward order revision.
Market talk that HTC's June sales might be down or flat month-on-month sent its shares down further until the company announced record monthly sales figures early to relieve the pressure.
Chang expected shares of HTC would consolidate before the investor conference at the end of this month, trading in a range between T$1,100-1,200.
In June, HTC's CEO Peter Chou told a shareholder meeting that the fundamentals of the company had not changed and he remained positive on the outlook in the second half.
HTC, which started transforming from a contract maker to a global consumer brand in 2006, saw in April its market cap surpass Nokia's, who still makes 10 phones for each one HTC makes. This year HTC's volumes have also surpassed phone industry majors Sony Ericsson and Motorola.
Last Monday, HTC opened the firm's new regional headquarters in Britain, reflecting its fast growth in Europe.
Research company Gartner has forecasted the smartphone market would expand by 58 percent this year and 35 percent next year.
($1 = 28.795 Taiwan dollars)
(Editing by Jonathan Standing and Jonathan Hopfner)