UBS: HTC on track to announce another quarterly loss
UBS expects HTC to report sales of $34.9 billion NT ($1.15 billion) for the first quarter, which would represent an 18.6% drop sequentially and an 18.4% decline year-over-year. Analysts were expecting HTC to report revenue of $54.6 billion NT ($1.8 billion USD). In addition, UBS' analysis has HTC losing money on every dollar of sales that comes into its coffers. The brokerage house forecasts a -3.5% profit margin for the period, a slight improvement from the -3.6% reported the fourth quarter of 2013, but down sharply from the .1% profit margin achieved in last year's first three months.
Overall, UBS predicts that HTC will report a net loss of $916 million NT ($30.2 million USD) for the quarter. In the prior quarter, HTC reported profits of $310 million NT ($10.2 million USD). A year ago, HTC reported an $85 million NT ($2.8 million USD) profit. UBS analyst Arthur Hsieh, chief electronics hardware analyst, says that without another source of income or a drastic cut in expenses, HTC will not meet expectations of a $412 million NT ($13.6 million USD) profit.
HTC is currently putting the finishing touches on the sequel to its HTC One Android flagship model. Code named the HTC M8 and dubbed the HTC One 2 by us media folk, the eagerly awaited high-end model could launch as soon as next month. UBS' Hsieh doesn't believe that one model can make a difference, so he doesn't expect HTC to be in the black until 2015. HTC had never reported a quarterly loss until last year's third quarter when it reported an operating loss of $101.3 million USD.
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