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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:]

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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dear htc
By Bubbacub on 7/7/2012 3:19:03 AM , Rating: 1
Get rid of sense and sell stock android.
Don't put a battery hogging tegra 3 CPU with two thirds the battery life and inferior performance in your European phones and then you won't have to bitch about your poor EU sales.

People want user replaceable betteries.


P.s. I've ditched my HTC desire this week for a galaxy nexus.

RE: dear htc
By Ytsejamer1 on 7/7/2012 8:49:32 AM , Rating: 2
It's too bad actually. Sense v2 and 3 were became very bloated and HTC went back to the drawing board and Sense v4 is actually pretty smooth and svelte. Samsung on the other hand seems to be loading their TouchWiz with every piece of garbage they can find...rarely leaving room for OS upgrades and the like.

I like Sense, but agree that it'd be nice to have at least an option to use the default Android environment.

I've been pretty happy with HTC but have to admit, the Samsung devices are absolutely stunning.

RE: dear htc
By sprockkets on 7/8/2012 1:19:27 AM , Rating: 2
Don't put a battery hogging tegra 3 CPU with two thirds the battery life and inferior performance in your European phones and then you won't have to bitch about your poor EU sales.

Two thirds? Yeah right.

Except for web browsing the One X Int comes up above the SG3, and that's even with a smaller battery. The GNex doesn't do much better either.

But hey it's stock!

RE: dear htc
By sprockkets on 7/8/2012 6:09:23 PM , Rating: 2
Oh wait, the link didn't post??? Here's proof for the moron who rated me down:

RE: dear htc
By Bubbacub on 7/9/2012 4:31:29 AM , Rating: 2
in web browsing on 3g - (the most common battery draining task that i ever ask of my phone) the usa version gives 9.65hrs vs 6.9 hrs on the tegra 3 version.

9.65/6.9 = 0.71 ok a tincy wincy bit more than 2/3.

"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton

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