HTC Q3 not quite as bad as feared

Taiwanese smartphone maker HTC has released its Q3 numbers and, while they were pretty ugly, they were towards the top end of its guidance.

HTC booked quarterly revenue of NT$21.40 billion with a net loss after tax of NT$4.48 billion and an EPS of -NT$5.41. While reporting its disappointing Q2 numbers HTC wisely chose to guide Q3 expectations down, predicting revenues in the NT$19-22 billion range and EPS of -NT$5.85 to –NT$5.51 range, so revenue came in at the top of that range and EPS exceeded it.

That’s where the good news ends, however, as this was a deliberately pessimistic outlook, presumably designed to ensure it wouldn’t be missed as the Q2 outlook had been. HTC had initially been hoping to bring in around NT$50 billion in Q2 but ended up at just NT$33 billion and a loss of almost NT$10 per share. The company had been counting on strong sales of its latest flagship device, which failed to materialize.

The harsh reality is that HTC will probably have to permanently resize to a much smaller scale than it had become used to during the smartphone boom. The going is tough for all smartphone OEMs bar Apple, Huawei and Xiaomi right now and quarterly losses in the billions are clearly not sustainable. This means we can expect to see the layoffs continue until the losses stop.