HTC Expects Loss Five Times Wider Than Estimates as Sales Plunge

HTC’s quarterly sales topped NT$135 billion just four years ago. Its rapid descent underscores how its product and marketing strategy failed in the face of cheaper phones from Xiaomi and a larger range of devices from Samsung Electronics Co.

HTC’s quarterly sales topped NT$135 billion just four years ago. Its rapid descent underscores how its product and marketing strategy failed in the face of cheaper phones from Xiaomi and a larger range of devices from Samsung Electronics Co.

Photographer: Simon Dawson/Bloomberg

HTC Corp. forecast a quarterly loss five times more than analysts’ estimates, driven by plummeting sales as the smartphone maker cedes market share to Xiaomi Corp. and Huawei Technologies Co.

Third-quarter loss will be NT$5.51 to NT$5.85 per share, the company said Thursday, compared with expectations for a loss of NT$1.17 per share. The projection for sales of NT$19 billion ($600 million) to NT$22 billion fell short of a NT$36.8 billion average estimate.

HTC’s quarterly sales topped NT$135 billion just four years ago. Its rapid descent underscores how its product and marketing strategy failed in the face of cheaper phones from Xiaomi and a larger range of devices from Samsung Electronics Co.

Founder, Chairwoman and Chief Executive Officer Cher Wang has stated she won’t consider mergers, even after a steady loss of market share pushed the company below the global top ten phone makers.

HTC will now change its product strategy to produce fewer models at longer time intervals while focusing on profits instead of growing shipments, Chief Financial Officer Chang Chialin told reporters on a teleconference Thursday.

There’ll be no one-time non-operating items this quarter and HTC expects to begin cutting costs from the first quarter of next year, he said.

Thursday’s forecast comes after the Taoyuan, Taiwan-based company in June cut its sales guidance for that quarter by 35 percent and wrote off NT$2.9 billion in idled assets, citing slowing demand for high-end smartphones and weaker China sales.

HTC’s stock has dropped 51 percent this year, closing at NT$70 in Taipei before Thursday’s announcement. Sales at the bottom-end of its third-quarter guidance would be the lowest in a decade when figures were reported at the parent level.

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