HTC posts operating loss as sales slump

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HTC.Greenjpg Reuters. Customers look at HTC smartphones in a mobile phone shop in Taipei July 30, 2013.

Taipei - HTC Corp. posted its second consecutive quarterly operating loss as a continued decline in sales dragged down earnings at the Taiwanese smartphone maker.

Fourth-quarter operating loss was NT$1.56 billion ($52 million), the Taoyuan, Taiwan-based company said in a statement today, compared with the NT$1.72 billion average of 19 analysts’ estimates compiled by Bloomberg.

Net income, boosted by the sale of its remaining stake in Beats Electronics LLC, was NT$310 million, missing the NT$694 million average of analysts’ estimates.

HTC’s release of its largest phone to date, called One Max, failed to halt a nine-quarter slide in sales even after signing Hollywood star Robert Downey Jr. to promote the brand and commencing sales of 4G handsets through China Mobile Ltd.

Profit from the sale of its 24.84 percent stake in Beats helped HTC avoid its second loss on record.

The earnings announcement was made on a Sunday afternoon, outside normal Taiwan business hours, and it was the second consecutive quarter that HTC posted its financial results at an unscheduled time.

Revenue for the quarter fell to NT$42.9 billion, compared with the NT$43 billion average of analyst estimates and the company’s own NT$40 billion to NT$45 billion forecast given on November 5.

Chief Financial Officer Chang Chialin, who joined the company in 2012, last month was appointed to the concurrent role of global head of sales as the company looks to develop new distribution channels to drive revenue.

HTC in September said it will sell its remaining stake in Beats for $265 million, booking a $85 million pretax profit from the transaction.

Beats will also repay a $150 million loan with interest, it said at the time.

One Max, released in October, became HTC’s largest handset, with a 5.9-inch (15-centimetre) screen, fingerprint sensor and HTC Zoe video highlights function.

The device was the company’s only major release for the quarter, with updated versions of its Desire series also going on sale. - Bloomberg News



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