Feature Article

October 04, 2013

HTC Confirms First Loss in Quarterly Earnings

On October 3, 2013, HTC released its unaudited earnings results for the third quarter of 2013. Unfortunately, the numbers confirmed what the company feared. In July, HTC predicted that it would lose money this quarter and sure enough, it was correct.

According to the figures, HTC reported a net loss of about $101 million on revenue of about $1.6 billion. The operating loss for the quarter was estimated at around $119 million. Earlier this year, HTC was predicting revenue of $1.7 to $2.0 billion. Regrettably, it came in lower than expected.

Earlier this year HTC delivered the HTC One, a device that we said was “a stunning piece of hardware that also delivers the goods on the software side.” Another stroke of bad luck for HTC was that the HTC One should have come out sooner.

There were many problems on the supply side. This had the calamitous effect of causing the smartphone to be way behind the scheduled delivery date. When you add that to the fact that sales for the HTC One have failed to meet company expectations over the past several months, you end up with revenue being down about 33 percent year-on-year.

Even though there does seem to be a love affair between fans and reviewers with the HTC One, it is still struggling. The new HTC One mini could also be causing HTC problems. This is a smaller version with a 4.3 inch display, overall slimmer but with most of its bigger brother’s functionality.

This device also had some manufacturing problems. According to a September report from Reuters, design issues with the HTC One mini have led to slow yields, which have led to low demand. In unaudited August revenue, HTC saw a fall of almost half the amount compared to the same month in 2012.

Since HTC went public in the stock market in 2002, this is the first time that the company has experienced a quarterly loss.

Edited by Rachel Ramsey

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