Smart­phone maker HTC says net loss will nar­row in Q3

The China Post - - TAIWAN BUSINESS -

Tai­wanese smart­phone maker HTC Corp. ( ) forecast Thurs­day that its net loss will nar­row in the cur­rent quar­ter thanks to com­pany-wide mea­sures to re­duce costs.

The Taoyuan-based com­pany said its July-Septem­ber rev­enue is ex­pected to be in the range of NT$19 bil­lion to NT$22 bil­lion (US$600 mil­lion to US$695 mil­lion), a new low in 10 years since it posted NT$15.44 bil­lion in the sec­ond quar­ter of 2005.

Gross profit mar­gin is ex­pected to be 19 per­cent to 19.5 per­cent in the third quar­ter, and losses per share are ex­pected to be in the range of NT$5.85 to NT$5.51.

In the sec­ond quar­ter of the year, HTC re­ported an op­er­at­ing loss of NT$5.1 bil­lion and a one-time charge of NT$2.9 bil­lion for idled as­sets and pre­paid ex­penses, trans­lat­ing into losses per share of NT$9.7.

“Weaker than ex­pected de­mand at the high end, con­sis­tent with the An­droid mar­ket, along with weak sales in China, lead to a year-on-year fall in the sec­ond quar­ter. Mean­while, year- onyear ship­ment vol­ume in­creases were seen across se­lect key emerg­ing mar­kets,” HTC said in a state­ment.

“HTC has be­gun to im­ple­ment com­pany- wide ef­fi­ciency mea­sures to re­duce op­er­at­ing costs across the or­ga­ni­za­tion and en­sure re­sources are ap­pro­pri­ately al­lo­cated to fu­ture growth,” the hand­set maker said.

HTC’s weak third-quar­ter forecast was a re­sult of a “tran­si­tion pe­riod” for prod­ucts be­fore the com­pany launches a “hol­i­day hero” smart­phone later this year that will fea­ture a “more fash­ion­able and trendy de­sign,” Chang Chia-lin, chief fi­nan­cial of­fi­cer and pres­i­dent of global sales at HTC, told a con­fer­ence call with in­vestors.

The com­pany plans to stream­line and op­ti­mize its prod­uct port­fo­lio by re­duc­ing its en­trylevel and low-end of­fer­ings, in an at­tempt to achieve bet­ter prof­itabil­ity rather than pur­su­ing vol­ume share, Chang said.

With these mea­sures, he added, HTC ex­pects a sequential in­crease in its fourth- quar­ter rev­enue and aims to break even in its smart­phone busi­ness in the “not too dis­tant fu­ture.”

Also on Thurs­day, HTC re­ported con­sol­i­dated rev­enue of NT$7.41 bil­lion for July, the low­est in the past 17 months.

HTC shares closed down 1.2 per­cent at NT$70 on the Tai­wan Stock Ex­change, com­pared with a 1.09 per­cent drop in the weighted in­dex.

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