Smartphone maker HTC says net loss will narrow in Q3
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.