HTC Corp (宏達電) yesterday said that it expects its smartphone business to improve this quarter and hopes it can break even in the next, after last quarter seeing its fourth straight quarter of net losses.
“We’ve seen sequential improvement on the smartphone business after the latest flagship HTC 10 launched in April,” HTC chief financial officer Chang Chia-lin (張嘉臨) told a teleconference. “We hope the momentum will be sustained, hopefully the smartphone business breaks even next quarter.”
Chang said the company’s latest flagship model has received positive feedback from the global market, with the US market’s preorder sales reaching “tens of thousands” of units.
Photo: Reuters
Consumers in Taiwan, the UK, Germany, the Middle East and Australia have also given positive nods to the HTC 10, he said.
HTC is planning a product launch in India before the end of this month, Chang said, adding that the company foresees its smartphone sales in the Indian market would outpace its sales performance in the Chinese market.
Commenting on the company’s virtual reality (VR) business, which also hit the market last month, Chang said the HTC Vive VR headset’s preorder sales are healthy and the company expects the segment could contribute as much as 10 percent to this year’s total revenue.
He said HTC’s VR product is different from its competitors, and the company plans to continue investing resources into the segment to ensure HTC’s leading position in the growing industry.
When asked if HTC plans to spinoff its VR business, Chang said: “Whatever we do structurally [for the VR business], we want to make sure that this is in the best interests of our shareholders.”
Last quarter, the Taiwanese smartphone maker saw a net loss of NT$2.6 billion (US$80.2 million), or loss per share of NT$3.16, down significantly from the net profit of NT$360 million, or earnings per share of NT$0.43, made over the same period last year.
On a quarterly basis, the scale of the net loss narrowed from NT$3.38 billion recorded in the previous quarter, the firm said.
HTC booked a disposal gain of NT$2.1 billion last quarter from the sale of a plot of land and a building in its Taoyuan plant.
Gross margin was 9.4 percent, plunging 10.26 percentage points from last year’s 19.66 percent and 4.48 percentage points from the previous quarter.
The 9.4 percent gross margin marks the lowest in the company’s history, according to HTC’s filings with the Taiwan Stock Exchange.
The scale of HTC’s operating margin loss also expanded from the previous quarter’s minus-16.07 percent to minus-32.4 percent last quarter, the firm’s data showed.
The company yesterday also reported monthly revenues of NT$5.75 billion for last month, plummeting 57.53 percent annually, but jumping 38.88 percent monthly.
In the first four months of this year, HTC’s revenues plunged 62.64 percent annually to NT$20.57 billion.
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