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Sales, profits, fall short of analyst expectations and early forecasts

HTC Corp. (TPE:2498), Taiwan's largest smartphone maker, released its unaudited results for the second calendar quarter, which ran from April through June.  The results were very poor.

Analysts had expected a recovery to a profit of $8.99B TWD [source].  Instead, HTC under-delivered, posting $7.4B TWD ($247.7M USD) in earnings.  That's down remarkably from the $17.52B TWD that the company pulled in last year.

Revenue was $91B TWD, less than the $94B TWD predicted by analysts.

A number of factors combined to yield the disappointing quarter for HTC.  One negative was a temporary sales ban in the U.S. that stalled the release of certain flagship handsets.  That sales ban came despite HTC vocally agreeing to comply with an Apple, Inc. (AAPL) feature ban.  HTC removed the infringing feature, but was treated with a lengthy delay anyhow.

The company was boosted when the U.S. International Trade Commission refused to grant a hasty "emergency" ban in Apple's third trade complaint against it.  However, that small victory came as little consolation in the wake of the costly market delay.

But the biggest single factor dragging HTC down was arguably the weakening European economy.  Amid the U.S. sales ban, HTC was hit by a double whammy when customers in cash-strapped European nations opted to skip purchases.

HTC has struggled to compete with the flagship handsets of Apple and rival South Korean Android manufacturer Samsung Electronics Comp., Ltd. (KSC:005930).  Samsung also struggled with European sales issues, but its much stronger profit margins and global sales led it to an impressive profit outcome.

EU flags
A weak European market cost HTC, amid stalled U.S. sales. [Image Source: Europe.bg]

Still, all is not lost for HTC, which has grown in multiple since it exploded onto the market in 2010.  The former contractor remains a premiere manufacturer, but weakening revenue and profitability have forced it to commit to trimming its workforce.  The company said likely 1,000 employees would be cut globally.

HTC's flagship U.S. smartphones -- the HTC One X and EVO 4G LTE -- remain quite competitive with Apple and Samsung's product in terms of features, even if they are underappreciated.

Shares of HTC stock were battered over 5 percent in trading on Taipei, Taiwan's stock exchange.

Source: HTC



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RE: Support
By StormyKnight on 7/7/2012 3:10:23 AM , Rating: 2
There would be stagnation hence my P4 Willamette comment. There would be no need to throw tons of money into R&D to make the next best thing. You could just tweak an existing design for years and still charge outrageous amounts of money for it and people will buy it. Why innovate when you can make more money for less effort???

With AMD's competition, it pushed Intel to stay ahead. Hell, it even pushed them more when they lost the performance crown to the Athlon series. So, if there was no AMD we'd be using lackluster CPUs not nearly as powerful as the ones we have today.

Same goes for any product whether it is electronics, automotive, retail stores, phone companies, wireless companies, etc etc etc, without competition we'd have inferior products at higher prices. Competition is good.


"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer














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