HTC reports second consecutive quarterly operating loss

Smartphone vendor HTC has posted its second consecutive quarterly operating loss of NT$1.56 billion (US$52 million) as a continued decline in sales dragged down the Taiwanese smartphone maker’s earnings.

Bloomberg reported that HTC’s net income, boosted by the sale of its remaining stake in Beats Electronics, was NT$310 million.

That brought the Taiwan-based smartphone maker’s net loss for the whole of last year to NT$1.33 billion, marking the first unprofitable year for HTC since 1997.

HTC’s release of its largest phone to date, called One Max, failed to halt a nine-quarter slide in sales even after signing Hollywood star Robert Downey Jr to promote the brand and starting sales of 4G handsets through China Mobile Ltd.

Profit from the sale of its 24.84 percent stake in Beats helped HTC avoid its second loss on record.


HTC revenue for the quarter fell to NT$42.9 billion, compared with the NT$43 billion average of analyst estimates and the company’s own NT$40 billion to NT$45 billion forecast given on Nov. 5 last year.

Chief financial officer Chang Chialin, who joined the company in 2012, last month was appointed to the concurrent role of global head of sales as the company looks to develop new distribution channels to drive revenue.

HTC in September last year said it will sell its remaining stake in Beats for $265 million, booking a US$85 million pretax profit from the transaction. Beats will also repay a $150 million loan with interest, it said at the time.

One Max, released in October, became HTC’s largest handset, with a 15cm screen, fingerprint sensor and HTC Zoe video highlights function. The device was the company’s only major release for the quarter, with updated versions of its Desire series also going on sale.

HTC net profit was T$0.3 billion ($10 million), compared to a net loss of T$2.97 billion ($99.9 million) in the previous quarter and profit of T$1.01 billion ($34 million) in the same quarter of 2012.

Reuters reported that the number highlights how quickly problems have piled up at a company that just over two years ago supplied one in every 10 smartphones sold around the world.

The company, which has lost nearly three-quarter of its market value in the last two years, is now worth about $4 billion, dwarfed by rivals like Apple and Samsung Electronics.

Despite its latest flagship product, the HTC One, garnering rave reviews, the company’s share of the smartphone market has declined to a mere 2.2 percent in the third quarter of 2013 from a peak of 10.3 percent in the third quarter of 2011, data from research firm Gartner show.

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