Print 27 comment(s) - last by bug77.. on Jul 10 at 7:55 AM

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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RE: Reap what you saw
By rudy on 7/9/2012 3:21:21 PM , Rating: 2
But then what would anyone buy an HTC phone for? HTC has no vertical integration, they dont make the main components nor have tons of money. Apple can secure contracts to get the latest displays from LG, Samsung makes nang, cpus, displays so they can keep the best for themself. HTC does not do any of this. So the only thing they have is quality of phone design and software. Lets be honest today a phone is a rectange with a display thats it, nothing more so there is nothing but the display, speeds as in CPU and software to set them apart.

Get it HTC is stuck making sense, they have no way out unless they can somehow buy into a leading display maker.

RE: Reap what you saw
By bug77 on 7/10/2012 7:55:43 AM , Rating: 2
Phone manufacturers had no problem competing on hardware before the smartphone came to be. Design, ruggedness, battery life, signal strength are all very important features that many reviews these days don't even bother to mention. No, we have to know how good is the FB integration. Ok, design is always mentioned, but battery life is almost always hidden under a 'YMMV' statement.

I'm also fine with competing on software if so they choose. But in this case, 'I released ICS after only 7 months, not 8-9 like the competition' is not acceptable.

"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller

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