HTC expects profitable 2Q14
Daniel Shen, Taipei; Adam Hwang, DIGITIMES [Tuesday 6 May 2014]
HTC expects operations in the second quarter of 2014 to swing to net EPS of NT$2.21-3 (US$0.073-0.099) mainly due to booming sales of its high-end HTC One (M8) and mid-range Desire series models, company CFO and president of global sales Chang Chia-lin said at a May 6 investors conference.
HTC posted consolidated revenues of NT$33.121 billion, gross margin of 21.03%, net operating loss of NT$2.048 billion, net loss of NT$1.881 billion and net loss per share of NT$2.28 for the first quarter of 2014. For the second quarter, HTC aims at NT$65.0-70.0 billion for consolidated revenues and 21.3-22.0% for gross margin.
HTC's strategy is to maintain growth in the high-end smartphone market segment, rebuild brand positioning in the mid-range segment, and maintain its presence in the entry-level segment, Chang said. There are differences marketing of high-end, mid-range and entry-level models in developed and in emerging markets, Chang indicated.
In China's smartphone market in particular, HTC's market share has risen to over 5%, the fifth largest, Chang said. In addition to a retail network of more than 3,000 outlets around China, HTC sells smartphones through online channels, Chang noted.
India's smartphone market has large growth potential, and HTC is currently the fourth or fifth vendor with a market share of 4-5%, Chang indicated. While entry-level models priced at below INR10,000 (US$166) account for 60-70% of smartphones sold in India, HTC focuses on mid-range and high-end models, and plans to expand its retail chain to 8,000 stores, Chang said.
HTC has outsourced production of its entry-level and mid-range Desire series to Taiwan-based ODM Compal Electronics and China-based Wingtech Group to more flexibly utilize in-house resources, not to cut production costs, Chang explained.
Due to posting a net loss per share of NT$1.60 for 2013, HTC's board of directors on May 6 decided not to distribute any dividend.
HTC on May 6 reported consolidated revenues of NT$22.079 billion for April, increasing 36.08% on month and 12.70% on year, and NT$55.200 billion for January-April, dipping on year by 11.51%.
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