TCL Communication Technology, a leading smartphone maker, yesterday said its revenue and profits fell sharply during the first three months of the year as weak handset sales continued to weigh heavily on the company’s performance.
The company said its net profit fell 92 per cent year on year to HK$14.25 million as sales in China shrank sharply during its ongoing business transition. Revenue for the period fell 17 per cent, it said in a regulatory filing.
The handset maker warned that it expects considerably lower net profits for the first six months of this year. Revenue will, however, improve during the second half of the year after its newly launched products gain market acceptance, TCL said.
TCL’s revenue from China slumped 70 per cent year on year to HK$245.9 million for the quarter and accounted for 4.6 per cent of the total sales.
Chief executive Guo Aiping said the firm is realigning its strategy in China, from low-end products to mid-and-high end products, and also revamping its sales channels. The business transition is expected to take place during the third quarter of the year, he said.
“The quarterly results meet our expectations. It is a transition period as the firm is revamping its China business,” said Chloe Liu, a Hong Kong-based analyst at Oriental Patron.