HTC set for third-quarter loss - Mobile World Live

HTC set for third-quarter loss

06 AUG 2015

Troubled smartphone maker HTC revealed it is heading for a loss in the third quarter of 2015, as it continues to struggle in the face of tough competition in the market.

The company said it has “begun to implement company-wide efficiency measures to reduce operating costs across the organisation and ensure resources are appropriately allocated to future growth”.

According to Reuters, Chialin Chang, the company’s CFO, said that cuts will be made “across the board”, and will be “significant”. Bloomberg said that this will entail producing fewer models at longer time intervals, and focusing on profit rather than volume.

Driving this is a pessimistic outlook for sales. It is forecasting revenue of TWD19 billion ($600 million) to TWD22 billion, compared with TWD33 billion in what was a weak Q2 – and down from TWD41.9 billion in Q3 last year.

Among the bad news revealed by the company today was that its July 2015 sales stood at TWD7.41 billion, a decrease of 14.65 per cent from the previous month and of 30.15 per cent year-on-year.

The company is forecasting Q3 EPS of “-TWD5.85 to -TWD5.51”, compared with -TWD9.70 in Q2 2015 (which translated to a group loss of TWD8 billion).

In its most recent quarter, HTC noted “weaker than expected demand at the high-end” – something affecting a number of Android vendors – as well as weak sales in China.

And, somewhat optimistically, it also “continues to invest in promising new product areas such as virtual reality”, although it is far from certain that this will provide much of a boost to offset the smartphone slowdown at least in the medium term.

HTC recently invested $10 million in virtual reality platform company WEVR.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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