Taiwanese smartphone brand HTC Corp (宏達電) has decided not to distribute cash dividends for last year because of losses, the second consecutive year in which it will not issue a dividend.
HTC, which has faced escalating competition from Apple Inc and Samsung Electronics Co in the high-end smartphone segment and from Chinese vendors in the mid-to-low range segment, posted a loss per share of NT$12.81 (US$0.42) for last year.
The figure was the second steepest loss in the company’s history after a loss per share of NT$18.78 in 2015.
The weak showing led HTC to opt against a cash dividend for the second year in a row.
HTC issued a cash dividend of NT$0.38 per share for 2014 after earnings per share of NT$1.80.
The decision was announced late on Monday after being approved at a board meeting, HTC said.
It said an annual general meeting has been scheduled for June 15 to get final approval of the decision from shareholders.
“It was predictable that HTC would not issue a cash dividend for 2016 due to its massive losses, and the lead had been factored into its share price,” Ta Ching Securities (大慶證券) analyst Andy Hsu (許博傑) said.
“The current buying is simply a technical rebound” from a 1.8 percent drop on Monday, Hsu said.
On Monday, HTC reported NT$4.67 billion in consolidated sales for last month, up only 0.09 percent from a month earlier even as its latest flagship model, the HTC U Ultra went on sale in Hong Kong, the Middle East, Southeast Asia and Europe after its launch in Taiwan in January.
Last month’s sales were up more than 10 percent from a year earlier, HTC said.
However, in the first two months of this year the smartphone brand’s consolidated sales fell 12.58 percent from a year earlier to NT$9.33 billion.
“The February sales data were disappointing because the U series failed to give a significant boost to HTC’s shipments,” Hsu said. “It seems that the HTC brand is lagging behind in the mainstream smartphone market worldwide.”
“HTC’s efforts to enter the virtual reality market also failed to help it climb out of its sales doldrums as its VR headset only accounted for a small fraction of sales. The pace of progress in pushing for new VR applications remains slow,” Hsu said.
The HTC Vive, HTC’s first VR headset, was unveiled in 2015 and went on sale last year. It was one of HTC’s gambits to diversify from its core smartphone market in the hope of generating a new revenue stream to turn around its money-losing business.
At an investors’ conference in the middle of last month, HTC said it hoped the U series would help the company trim losses in the first quarter, but after monthly sales in January and last month failed to top NT$5 billion, analysts remained cautious about this month.
In the fourth quarter of last year, HTC incurred a loss per share of NT$3.77, the seventh consecutive quarter in which it reported a net loss.
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