HTC reports another quarterly loss, but things are improving

HTC reports another quarterly loss, but things are improving
The second quarter is over and former smartphone giant HTC has announced its financial results. The Taiwanese brand posted another loss, though the situation continues to improve.

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.

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