HTC today announced its third quarter earnings result, driving home a loss of $102 million on a revenue of $1.6 billion. HTC also posted gross margin of 20.4 percent and an operating margin of -7.4 percent. This is the first quarterly loss HTC has posted. The company hopes for similar revenues and gross margins for the fourth quarter as well. Also Read - HTC Desire 20+ launched with 48-megapixel quad rear camera setup
The Taiwanese smartphone vendor also announced it had sold back the remaining 24.85 percent stake in Beats Audio for $415 million as well as 100 percent stake in Saffron Digital for $47 million. Also Read - HTC Wildfire E Lite smartphone design leaks online
HTC also predicts that its flagship product will sell better in Q4 this year than what it did in the same quarter last year. However, HTC also hinted that it will go deeper into the affordable smartphone market in the coming quarters. Also Read - HTC Wildfire E Lite listed on Google Play Console
The press release follows:
HTC REPORTS 2013 THIRD-QUARTER RESULTS
TAIPEI, Taiwan – November 05, 2013 – HTC Corporation (the Company, TWSE: 2498), a global leader in mobile innovation and design, today announced consolidated results for the Company and its subsidiaries for the third quarter of 2013. Posting a quarterly revenue of NT$47 billion, with a gross margin of 20.4% and an operating margin of -7.4%, net loss was reported at NT$3 billion, earnings per share after tax were -NT$3.58.
“We have delivered good progress in the third quarter,” said Peter Chou, CEO of HTC, “with the introduction of HTC One Mini and One Max, we now have an HTC One for everyone.” “We have also launched the Here’s To Change global brand campaign, affirming our role as the change-maker challenging the status quo since the dawn of the mobile phone industry, as well as our mission of continuing to bring change into the hands of people around the world.”
Building on the success of the award winning HTC One, in the third quarter the company introduced the HTC One mini and the HTC One max, delivering a family of devices that offer something for everyone. The launch of the new mid-range Desire 601 and entry-level Desire 300 further expanded HTC’s portfolio, enabling consumers to enjoy a premium experience at any price point. Finally HTC released a blue edition of the HTC One and a limited edition HTC Butterfly s Hello Kitty phone, bringing a fresh and unique approach to product design and innovation.
The third quarter also celebrated the HTC One winning further accolades from some of the most influential consumer technology titles, including “Phone of the Year in 2013” by T3 Gadget Awards, Pocket-Lint, Tech Radar and Mobile Geeks, in addition to “Best European advanced smartphone 2013 – 2014.” HTC’s Change campaign featuring Robert Downey Jr. also significantly ramped up consumer engagement and positive sentiments, increasing advertising awareness by 12% and brand momentum by 15%, in the markets that the campaign was aired.
After two years of working together, HTC sold back the remaining 24.85% stake in Beats Audio for a total payment of US$415 million and focused on the development of its own proprietary sound technology. HTC BoomSound which is already receiving positive industry feedback, seamlessly integrates hardware and software algorithms, delivering the ultimate audio experience to consumers. Additionally, HTC sold 100% of its stake in digital content provider Saffron Digital for US$47 million, while retaining permanent royalty-free license to its world-wide media services.
During the third quarter, HTC saw sustained momentum in the EMEA region, while maintaining number one market share in Taiwan. For the first time through the launch of HTC One by Verizon, HTC became available across all four major US carriers in the US and in China, the HTC One max is expected to be market’s first wave of TD-LTE products, marking yet another milestone for leadership in global 4G technology innovation.
4Q 2013 Outlook
The Company’s outlook for the fourth quarter of 2013 is as follows:
Revenue is expected to be in the range of NT$40 billion to NT$45 billion
Gross profit margin expected to be 20% +/-1%
EPS is expected to be in the range of NT$0.1 to NT$1.7