HTC warns of quarterly loss

Taiwanese smartphone maker HTC has warned that it is expecting to make a loss in 3Q13. It said in a statement that operating margin for the forthcoming quarter is expected to be in the range of zero per cent to negative eight per cent.

HTC posted quarterly revenue of NT$70.7bn ($2.35bn) for 2Q13, 22 per cent less than it made in the same period last year, when it generated NT$91.04bn.

Net profit fell a staggering 83 per cent year on year, from NT$7.4bn in 2Q12 to just NT$1.25bn in 2Q13.

HTC’s business in the US saw sequential growth in the quarter as well as expansion in retail channels, the firm said, adding that EMEA saw “renewed strength in major Western European markets and emerging countries”.

The firm also said its recently launched HTC One device performed well in the market, better than its flagship products in the same period last year. It said the device has also helped the company establish strong brand awareness and as a result it has regained “superphone” market share across major markets including China.

The vendor also has plans underway to launch a range of mid-tier products in the coming months.

“My leadership team continues to focus on execution,” said Peter Chou, CEO of HTC. “We are seeing expected results as we fill the channels and meet demand for the new HTC One. As we broaden our focus to include a new member of the HTC One family, the recently announced One mini, we are looking forward to delivering great products and results in [the second half of the year].”

The loss warning suggests that smartphone vendors are struggling to keep up with market leaders Apple and Samsung. Japanese vendor NEC announced this week that it would cease the production and sale of smartphones, admitting that it is “difficult to foresee improved performance in the future”.