Wednesday, April 6, 2011

HTC Surpasses Nokia’s Market Value as Smartphones Drive Profit

HTC Surpasses Nokia’s Market Value as Smartphones Drive Profit : HTC Corp. (2498), Asia’s second-largest maker of smartphones, passed Nokia Oyj (NOK1V)’s market value as demand for phones that run on Google Inc. (GOOG)’s Android operating system drives sales of the Taiwanese company’s handsets.

HTC rose 5.3 percent in Taipei trading yesterday, taking its market value to $33.8 billion, exceeding the $33.6 billion value of its Finnish competitor. Nokia climbed 1.1 percent to 6.26 euros.

The 33 percent surge in the stock this year makes HTC, which specializes in making handsets with touch screens and Internet connectivity, the world’s third-largest maker of smartphones by market value. Nokia has tumbled 19 percent in Helsinki trading this year as market share losses prompted analysts to downgrade the stock.

Standard & Poor’s on March 30 cut its debt rating on Nokia for the first time. “High competitive pressure” will push the operating margin on Nokia phones lower in the next two years as it makes “further significant market share losses,” S&P said at the time.

HTC’s operating margin, which measures the percentage of sales less the cost of making and selling phones, was 16 percent in the quarter ended Dec. 31. Nokia’s was 7 percent over the period. Of 36 analyst recommendations compiled by Bloomberg, 29 say investors should buy HTC shares while none say sell. Nokia has 23 “sell” ratings and 19 “buy” recommendations.

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