HTC: One sales are good, more new mid rangers coming end-Q3, but HTC might be back in the red next quarter
posted by Victor H.
Jul 30, 2013, 4:58 AM
HTC has just unveiled its financial results for the second quarter of 2013 and on revenues of around $2.36 billion (NT$70.7 billion) it scored a small $41.8 million net profit. Sales of the flagship HTC One are good and that’s the main contributing factor.
The HTC One "has been performing very well" in China, the US and EMEA, according to company chief executive Peter Chou.
"If you compare the HTC One -- in terms of sell-out, in terms of our internal data -- to the combined hero products we had over the same period last year, it's actually performed better," the HTC financial officer added, likely comparing the 2013 flagship to last year’s One X and One S.
The company did not provide any specific numbers for HTC One sales, though.
What’s clear is that tough times lie ahead. HTC’s guidance for next quarter shows that it expects anything from no profit performance to a net loss of 8%.
To avoid that the company has just launched the 4.3-inch HTC One Mini, but it is also planning to release additional mid-tier smartphones. One thing that it is strongly focused on is also trying to capture the attention of Chinese users looking for a high-end device.
"Our strategy is we want to have good market share in the high-end smartphone [market], especially in a market like China, I think fewer suppliers can enter into that segment," said Chou. "HTC is one company who are able do that, so we will continue to strengthen our position in that area. We definitely don't want to limit our segment, but we want to make sure we are a strong player in the high-end segment."
Let’s not forget that China is the biggest phone market in the world right now, having surpassed the U.S. market in size a couple of quarters ago.
HTC reports 2013 recond-quarter results Taipei, Taiwan – July 30, 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 second quarter of 2013. 2Q 2013 Results HTC posted quarterly revenue of NT$70.7 billion, with gross margin of 23.2 % and operating margin of 1.5%. Net profit and EPS were NT$1.25 billion and NT$1.50, respectively. "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 2H." HTC announced key appointments, including Jack Yang to president of South Asia, Sirpa Ikola to senior director of marketing for South Asia, and Lorain Wong to vice president of global PR. As manufacturing ramped up, the US saw sequential growth in 2Q, as well as expansion in retail channels. EMEA saw renewed strength in major Western European markets and emerging countries. Progress was observed across Asia. HTC gained market share in Taiwan, showing an improved presence in Hong Kong and warm reception of its products by consumers in Japan. In China, sales of HTC's high-end models improved, while competition at the mid-tier and affordable intensified. In South Asia, the improvement of key operator relationships provides optimism about the region. 3Q 2013 Outlook The Company's outlook for the second quarter of 2013 is as follows: 3Q revenue is expected to be in the range of NT$50bn to NT$60bn Gross profit margin is expected to be in the range of 18% to 21% Operating margin is expected to be in the range of 0% to -8% The new HTC One has performed well in the market, better than that of our hero products for the same period last year. We aim to extend the momentum as we enter into the second half of 2013. The new HTC One has also helped the company establish strong brand awareness and received numerous accolades as the world's best smart phone. With the help of HTC One, we have regained superphone market share across major markets including China. We also have plans underway to launch a range of innovative and competitive mid-tier products in the coming months. We hope to regain momentum and market share in these segments in Q4. This will address our challenge of mid-tier products competiveness Our overall gross margin has been impacted by the relatively higher cost structure, lack of economy of scale and certain provisions needed to facilitate the clearance of aging products in the channel. Actions have been taken and we expect to see improvement in Q4 We are also optimizing our organization, including the improvement of management efficiency and effectiveness. People, innovations, and technology are the core assets of HTC. We will continue to invest in innovations and technology, as well as retaining and rewarding our best talents. We look forward to a brighter future for HTC and continue to delight our customers with the best and most exciting products
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