HTC reports another quarterly loss, but things are improving5
HTC's losses almost halved thanks to an improved operating margin
HTC reported consolidated revenues of NT$ 1.35 billion ($47.8 million) for the second quarter of 2021. Total sales remained flat year-over-year, putting an end to the consistent declines.
Additionally, losses narrowed to NT$ 1 billion ($36 million) during the quarter from NT$ 1.7 billion ($61 million) a year ago, a significant improvement that was attributed to further cost reductions and margin improvements.
More specifically, gross margin rose to 29.9% in the second quarter, up from 26.5% twelve months earlier and 29% in the first quarter. HTC’s operating margin dramatically improved too, leaping from -125% to -77.8%.
The brand still has a long way to go before reaching profitability, but an operating margin of -77.8% is HTC’s best since the fourth quarter of 2018, when it registered a margin of -68.7%.
As for how the company cut its costs, marketing expenses remained flat at NT$ 400 million for the quarter while spending on R&D was cut from NT$ 900 million to NT$ 600 million. HTC also reduced its general admin expenses from NT$ 700 million to NT$ 500 million.
It’ll remain to be seen how HTC performs in the second half of 2021, but there’s no denying the company is finally on a positive path. Last month the brand introduced a couple of VR headsets and in the coming months it’s expected to unveil more budget 5G phones.