HTC Profits Drop 98%

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Taiwan-based HTC has released its quarterly earnings report. The smartphone maker earned record low profits as earnings dropped 98 percent year-over year. Experts blame the poor results in part on the delay of the launch of the new HTC One.

InformationWeek’s Eric Zeman reported, “HTC reported its first quarter results and the news is alarming. The company saw its year-over-year profit drop by a staggering 98.1% as it managed to eke out a meager profit of just $2.83 million. That’s the smallest profit earned by the company since it began selling devices under its own name in 2006. The company generated about $1.42 billion in revenue, a 39.6% drop. HTC missed its guidance of $1.66 billion to $2.0 billion by a wide margin.”

Bloomberg’s Tim Culpan noted, “HTC lost early momentum for its HTC One handset in February as a shortage of camera components forced it to delay shipments in key markets by as much as a month. Prospects for revenue to rebound this quarter may be limited as the new device becomes widely available less than a month before Samsung Electronics Co.’s new Galaxy S4, which goes on sale in the U.S. on April 26. ‘These numbers show the production shortage really is that bad, and my sense is that it won’t get much better in the second quarter because many of those issues continue,’ said Dennis Chan, an analyst at Yuanta Securities Co. in Taipei, who recommends selling the stock. ‘For smartphones, timing is everything and the delay means they lose that timing.'”

The Wall Street Journal’s Eva Dou observed, “The Taiwanese manufacturer has been struggling against the dominance of Samsung Electronics Co. and Apple Inc. in the smartphone market, as well as the emergence of Chinese low-end market rivals. In 2010, HTC was the largest vendor in the U.S. of devices running Google Inc.’s Android operating system.”

PCMag’s Stephanie Mlot added, “HTC is also partnering with Facebook to release the first smartphone with the social network’s new Facebook Home interface built in. Facebook Home is ‘a new way to turn your Android phone into a great, living, social phone,’ and will come pre-loaded on the new HTC First. It will also be available for the HTC One X and One X+, Samsung’s Galaxy S III and Galaxy Note II, as well as the HTC One and Galaxy S4, upon launch.”