HTC Warns of Losses in Q3

Taiwan-based HTC used to be one of the largest smartphone vendors in the U.S., but recent sales have been disappointing. Now the company is warning that it will likely lose money in the third quarter.

The Wall Street Journal’s Eva Dou reported, “Stung by a series of high-profile executive departures, a wilting share price and supply-chain fumbles, HTC warned it would rack up its first operating loss to date in the third quarter. HTC, which once was only second to Apple Inc. in U.S. smartphone sales, is grappling with razor-thin margins as it tries to revamp its entire mobile strategy and expand its offering of midrange devices to shift its weight from the slowing high-end smartphone market.”

Information Week’s Eric Zeman added, “Revenues have collapsed as much as 30% on slowing sales of the HTC One, its flagship smartphone. Further, the company has been hammered by inventory costs.”

AppleInsider’s Sam Oliver noted, “HTC’s operating margin was just 1.5 percent in the third quarter, but the company has forecast a range of zero to negative 8 percent operating margins in the third quarter. The Taiwanese smartphone maker revealed it plans to launch a range of ‘innovative and competitive mid-tier products in the coming months.’ HTC executives acknowledged that it has not been competitive in the mid-range smartphone market, where the industry is currently seeing the most growth.”

Daily Tech quoted HTC CEO Peter Chou who said, “My leadership team continues to focus on execution. We are seeing expected results as we fill the channels and meet demand for the new HTC One. As we broaden our focus to include a new member of the HTC One family, the recently announced One mini, we are looking forward to delivering great products and results in 2H.”