HTC Q3 Profit Beats Estimates as Cost Cuts Offset Weak Sales
Taipei: Taiwanese smartphone maker HTC Corp swung to better-than-expected profit in the third quarter from a heavy loss a year earlier as cost cuts helped it offset the impact of still-sluggish sales.
HTC said on Friday it earned 640 million Taiwanese dollars ($21 million) in unaudited net profit during the July-September quarter, well above a 216.23 million Taiwanese dollars mean estimate of 13 analysts polled by Thomson Reuters. In the same period a year earlier, it turned in a loss of 3 billion Taiwanese dollars.
The company makes devices, such as its flagship One M8, that consistently garner accolades from critics but fail to lure customers. The former contract manufacturer has struggled to maintain a distinctive brand image in an increasingly crowded marketplace.
HTC said during its last quarterly earnings briefing that improved efficiency in its sales and marketing operations would help the company maintain profitability in July-September after booking losses in third quarter 2013 and the first quarter of this year.
Sales in July dropped 33 per cent from the same month a year earlier, but recovered to rise by 10 per cent in August compared with the year-earlier month, the company has said.
HTC's sales in September fell 7.9 per cent on year to T$16.7 billion, the company said in a separate release on Friday, adding year-to-date revenue through September was down 13 per cent to 140 billion Taiwanese dollars.
While HTC's sales slip, the overall smartphone market is buoyant. Researcher IDC predicts worldwide smartphone shipments will expand by 24 per cent this year, while Silicon Valley powerhouse Apple Inc moved a record number of new iPhones during the models' first weekend of sales.
Brisk business for the iPhone 6, which many view as the main competitor to HTC's One M8, likely cut into HTC's sales in September, SinoPac Securities analyst Calvin Huang wrote in a recent research note.
Shares in HTC closed up 2.3 per cent before the earnings release, compared with a 1.5 per cent gain in the benchmark TAIEX index.
Copyright @ Thomson Reuters 2014
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