HTC Third Quarter Results Disappoint, Only Growing In China Market

HTC’s recent troubles continue as their newly reported numbers from the third quarter of 2012 show as much as a 23 percent drop in overall revenue, with only the Chinese market showing any signs of growth. HTC, now the industries number 5 smartphone maker, is a well-known name but has been hurt by competition from Samsung and Apple, sees overall revenue drop to around $2.34 billion, a drop from $3.04 billion in the second quarter. Still, those numbers are above the $2.26 billion HTC posted in the first quarter, but that hasn’t stopped the company from giving more signs that trouble still lies ahead.

“China will continue to see growth in the third quarter, while other markets will have different degrees of decline,” Chief Financial Officer Chialin Chang told an investor conference.

“Europe, Middle East and Africa will face challenges because of macro softness and competition,” Chang said.

Even while HTC’s incoming revenue is higher than the first quarter, its gross and operating profit margins are set to disappoint. HTC said that it expect a gross margin and an operating margin of around 25 percent and 7 percent respectively. That’s down from 27 percent and 9 percent in the second quarter. If HTC hits the 7 percent operating margin right on the head, it will result in an operating profit of just $163.8 million dollars.

While HTC’s newest One Series generally saw favorable reviews, sales just haven’t taken off and with a price cut just three months after launch, many see that as a bad signal.

Can HTC ever make a triumphant return or is it time to start focusing on their competition?


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