Taiwan's HTC expects revenue to fall in Q3

Jul 31, 2014

Taiwan's struggling smartphone maker HTC said Thursday it expected revenue in the July-September quarter to up to 35 percent from Q2 as sales slowed for some products.

TAIPEI - Taiwan's struggling smartphone maker HTC said Thursday it expected revenue in the July-September quarter to drop up to 35 percent from Q2 as sales slowed for some products.

HTC estimated that revenue in the third quarter to be in the range of Tw$42 billion-Tw$47 billion ($1.4 billion-$1.57 billion), down 28 percent to 35 percent from the previous quarter when revenue almost doubled to Tw$65.1 billion on-quarter.

Gross profit margin in the current quarter is estimated to be 22.5 percent to 23.0 percent while earning per share is expected to be in the range of Tw$0.05-Tw$0.69, it said in a statement.

"Some of our products, after the initial excitement, have settled at a lower level," chief financial officer Chialin Chang said. "But the good thing is it is stabilised."

HTC's net profit came in at Tw$2.3 billion in the second quarter, aided by the good sales of its new flagship smartphone HTC One M8 and other models, the company said.

That was up 80 percent on-year and much improved from a net loss of Tw$1.88 billion in the first quarter, when sales hit a three-month low.

The HTC One M8 and Desire 816 dominated in the Taiwan market while sales momentum was "sound" in China and India in that period, the company said.

However, income in the three months to June was at the bottom range of a Tw$65 billion-Tw$70 billion forecast and analysts warned HTC had a long way to go before regaining lost ground to rivals Samsung and Apple and low-cost Chinese rivals such as Lenovo and Huawei.

In the 2013 third quarter, HTC swung to its first net loss of $101 million since listing in 2002, as it fell out of the world's top 10 vendors and has been struggling to increase its foothold in the highly competitive smartphone market.