Taiwanese smartphone maker HTC has reported a dramatic slump in quarterly profits. The company had its lowest earnings in eight years, but top execs told employees that a recovery is on the horizon.
Bloomberg's Tim Culpan reported, "HTC Corp., Asia’s second-largest smartphone maker, posted operating income that was lower than analysts’ estimates as a lack of new models prompted a loss of market share. Fourth-quarter operating income for the period was NT$600 million ($21 million), compared with the NT$1.11 billion average of 20 analyst estimates compiled by Bloomberg. Net income was NT$1 billion, the Taoyuan, Taiwan-based company said in a statement today. That’s the lowest since 2004 and less than the NT$10.9 billion it posted a year earlier."
Sarah Mishkin with The Financial Times blogged, "Taiwanese smartphone maker HTC continues its struggle in an increasing competitive market. The company announced that income was down 91 per cent for the fourth quarter of last year. It’s more bad news, after profits in the third quarter were down nearly 80 per cent. Investors seem to be getting used to it – shares on Monday were up slightly at 0.35 per cent, but have fallen hard over the past year."
The Verge's Aaron Souppouris noted, "The poor results came despite the Taiwanese manufacturer releasing the 5-inch 1080p Droid DNA Android smartphone and a pair of Windows Phone devices, the heavily-marketed flagship 8X and budget 8S. There could be light at the end of the tunnel, however, as all three of the aforementioned devices were released mid-quarter and so didn't have enough time to fully impact HTC's finances. CEO Peter Chou believes that 'the worst for HTC has probably passed,' adding that the company would raise its marketing budget considerably in an effort to better compete with market leader Samsung.
According to The Wall Street Journal's Lorraine Luk, "HTC Corp. is vowing to make a comeback in the smartphone market this year and Chief Executive Peter Chou and his management team are going all out to rally the troops.... 'Peter (Chou) told us that the worst is over. 2013 will be a better year and HTC wants to regain its global top 3 position this year,' said an employee, who declined to be named. 'He also led us to shout some slogans. But to be frank, most of us still don’t know how HTC can make a comeback this year as the top managers didn’t tell us any solid plan or direction.'"