HTC, Samsung results flop
Tech giants’ quarterly profits miss analysts’ forecasts as phone sales disappoint.
Underwhelming sales of the HTC One and the Samsung Galaxy S 4 led the two phone-making technology giants to miss analysts’ quarterly profit estimates, according to preliminary earnings reports released Friday.
In the quarter ended June 30, HTC Corp., based in Taiwan, posted a net profit of $42 million, down 83% from a year earlier.
Samsung Electronics Co., based in South Korea, said its operating profit was about $8.3-billion, up 50% from a year earlier, but that was still considered a disappointment in the eyes of analysts. HTC and Samsung spent heavily on marketing in the last quarter as they launched their new phones. Those costs cut into profits.
Now, the spotlight turns to a series of follow-up versions of the high-end Android smartphones and whether they will sell well enough for the companies to sustain sales growth in the hot summer-buying season.
The HTC One Mini is expected to be released by August. It’s expected to feature a 4.3-inch screen and come with slightly cheaper components than the 4.7-inch HTC One. By the winter, HTC could unveil an HTC One Max smartphone-tablet combination device. Among its standout features will be a battery with a long charge.
HTC also recently released a version of the One that comes with an unedited version of Android. Typically, smartphone makers tweak the default Android operating system to include their own apps and branding.
Samsung has a mini version and an untouched version of the Galaxy S 4 too. There’s even the hardy Galaxy S 4 Active and the camera-centric Galaxy S 4 Zoom.
The smartphone business generates 70% of Sam- sung’s profits, according to Reuters. And weakening smartphone sales growth has caused Samsung shares to tumble recently. That’s problematic for a company looking to inject more capital into research and development. Reports this week say Samsung plans to spend $4.5 billion on five new research centers in South Korea during the next three years.
Meanwhile, HTC endured turmoil in its executive ranks in the last quarter after record-low earnings in the first quarter. Several high-ranking executives left the company, including its chief executive for Asia and chief product officer.