Mon, Jan 06, 2014 - Page 13 News List

HTC posts another loss on falling handset sales

SIZE IS NOT EVERYTHING:The release of the One Max, HTC’s biggest phone to date, could not stop the firm from recording a sales drop in the final quarter of last year

Bloomberg

HTC Corp (宏達電) posted its second consecutive quarterly operating loss as a continued decline in sales dragged down the Taiwanese smartphone maker’s earnings.

Its fourth-quarter operating loss was NT$1.56 billion (US$52 million), the Taoyuan-based company said in a statement yesterday, compared with the NT$1.72 billion average of 19 analysts’ estimates compiled by Bloomberg.

Net income, boosted by the sale of its remaining stake in Beats Electronics LLC, was NT$310 million, missing the NT$694 million average of analysts’ estimates.

That brought the Taoyuan-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.

HOLLYWOOD INFLUENCE

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.

UNUSUAL HOURS

The earnings announcement was made on yesterday afternoon, outside normal business hours, and it was the second consecutive quarter that HTC posted its financial results at an unscheduled time.

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 (張嘉臨), 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 US$265 million, booking a US$85 million pretax profit from the transaction. Beats will also repay a US$150 million loan with interest, it said at the time.

MAJOR RELEASE

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.

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