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January 6, 2014

HTC misses estimates for Q4 as shares fall

The firm remains in operating loss despite the release of new products.

By Cbr Rolling Blog

HTC One

HTC shares have dropped 4% to about NT$133 (£2.7) after reporting a net income that missed analyst estimates for a fourth consecutive quarter.

Net income for the fourth quarter ending in December was NT$310m, compared to a profit of NT$1bn during the same period last year. Analysts from Bloomberg had been expecting an average net income of about NT $694m.

The Taiwanese smartphone maker narrowly avoided a second consecutive loss, helped by the sale of its remaining 25% stake in headphones maker Beats Electronics for $265m.

However, operating loss was NT$1.56bn while sales grew to NT$42.9bn, in line with the company’s expectations in November.

HTC, which was once a leader in Android smartphones, has lost nearly three-quarters of its market value in the past two years, hurt by rising competition from Apple, Samsung and other Chinese brands.

The company saw its share of smartphone shipments fall to 2.2% in the third quarter of 2013, from a peak of 10.3% two years ago, according to recent figures from research firm Gartner. Another study by Consumer Intelligence Research Partners in October found that a fifth of Android users are swapping their devices in favour of Apple’s phone.

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HTC has launched new products such as the all-gold edition of the HTC One handset and HTC One Max on top of a $1bn marketing campaign starring Iron Man actor Robert Downy Jr in efforts to regain market share.

Since November, HTC has also been selling low-cost devices after focusing on high-end models as well as exploring cost-cutting options such as outsourcing some production.

Is this enough to regain its share of the market?

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