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HTC Posts Fall in Q3 Revenue as Smartphone Sales Sputter

HTC Posts Fall in Q3 Revenue as Smartphone Sales Sputter

By Reuters | Updated: 31 July 2014 13:54 IST

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Taiwan's HTC Corp forecast that revenue in the July-September quarter will likely decline as sales of its flagship phone begin to taper off after a strong second quarter.

Total third-quarter revenue is likely to fall between TWD 42 billion ($1.40 billion) to TWD 47 billion, compared with TWD 47.05 billion in the same period of 2013, the company said Thursday ahead of the smartphone maker's quarterly investor conference.

After a relatively strong rollout of its flagship One M8 (Review | Pictures) phone in late March, company chief financial officer Chialin Chang admitted that demand for the firm's "new products" has settled at a low level.

"In light of the predicted revenue decline, we have to adjust resources appropriately to maintain profitability," Chang said, adding that the firm will "streamline" its sales and marketing operations.

HTC's sales have already started losing steam, with the company's overall revenue having suffered a steep 27.4 percent year-on-year tumble in May and was virtually unchanged in June, leading to a second-quarter revenue decline of 7.9 percent.

Gross profit margin in the third quarter is expected to be in the range of 22.5 to 23 percent, the company said, a bit higher than the 22.2 percent of the second quarter.

HTC had previously reported higher-than-expected second-quarter net profit of T$2.26 billion.

It will likely face further headwinds in the second half of the year with the much-anticipated release of a new large-screen iPhone model from industry giant Apple Inc.

© Thomson Reuters 2014

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