HTC Posts Wider-Than-Estimated Quarterly Loss as Sales SlumpLulu Yilun Chen and Adela Lin
HTC Corp., Taiwan’s biggest smartphone maker, posted a third-quarter loss wider than analyst estimates as its handsets lost market share to devices from Apple Inc. and Samsung Electronics Co.
The company had a net loss of NT$2.97 billion ($101 million) in the three months ended September, Taoyuan City, Taiwan-based HTC said in an e-mailed statement today. That compares with the NT$1.71 billion average loss of 16 analyst estimates and is the first on a consolidated basis since at least 2008, according to data compiled by Bloomberg.
HTC’s flagship One has failed to arrest sliding sales amid product delays and changes to strategy as it faces intensifying competition from Chinese producers including Huawei Technologies Co. The company, which wasn’t among the top five producers in the second quarter, plans to boost promotion with actor Robert Downey Jr. and add cheaper devices to revive growth.
“HTC needs to figure out if it just wants to focus on the high-end market or the mid- to low-end segment, and right now it is missing out on both,” said Wang Wanli, a Taipei-based analyst at CIMB Securities Ltd. “In the fourth quarter many new products are in the pipeline, including iPhone, Samsung and Huawei, HTC only has one new model so they won’t see a strong pick up.”
Shares of HTC gained 1.5 percent to close at NT$135 in Taipei. The stock has lost about 80 percent of its value in the past two years.
The operating loss in the third quarter was NT$3.5 billion and sales were NT$47 billion, the company said today. Analysts had projected an operating loss of NT$2.2 billion on sales of NT$ 54 billion.
HTC, the first maker of phones using Google Inc. software, in July forecast an eighth straight drop in quarterly sales as it struggles to compete with Apple and Samsung.
The company was ranked ninth in the global smartphone market during the second quarter, with 2.8 percent share compared with 5.8 percent a year earlier, according to data from Bloomberg Industries and IDC. That compares with 31.7 percent for Samsung, 13.2 percent for Apple and 4.8 percent for Lenovo Group Ltd.
HTC was a contract manufacturer before it began promoting its own brand in 2006. The company had a short-lived reign at the top of the U.S. market in the third quarter of 2011, when it accounted for 24 percent of smartphone shipments, according to researcher Canalys.
The company in February 2012 said it had “dropped the ball” on products, pointing to weaknesses in design and engineering. The HTC One, which was supposed to herald a reversal of fortune, has so far failed to stop a slide in the company’s sales since the phone’s introduction was delayed to the same timeframe as Samsung’s flagship Galaxy S4.
HTC lost the early momentum of unveiling its HTC One in February prior to Samsung’s Galaxy S4 as a shortage of camera components forced it to delay shipments.