HTC execs: Oh dear, did we say we'd sell lots of smartphones? Our bad

Revised guidance slashes sales forecast by nearly a third


The bottom appears to have dropped out of HTC smartphone sales, leaving the Taiwanese firm forced to revise its second-quarter earnings guidance downward by nearly 30 per cent.

Just over a month ago, HTC said it expected to see revenue of between NT$46bn and NT$51bn New Taiwanese dollars ($1.49bn to $1.66bn in US dollars) in the second quarter, and earnings of between NT$0.06 to NT$0.34.

On Friday, the electronics maker issued a bulletin featuring a dramatic adjustment of those figures. HTC now expects next quarter's revenue to come in at NT$33bn to NT$36bn ($1.07bn to $1.17bn in US dollars). And rather than earning a few pennies per share, it says it now expects to lose between NT$9.70 and NT$9.94 per share.

HTC has also revised its expected gross profit margin for the quarter downward, from 23–23.5 per cent to 19–19.5 per cent.

Not surprisingly, HTC blames "prevailing market conditions" for its predicament. But any way you slice it, its execs goofed – they were expecting to sell far more phones than they actually have in the two months of the quarter that have passed so far.

Specifically, the revised guidance is down to "slower demand for high-end Android devices" like the recently launched HTC One M9, the company said.

Another problem: China. HTC hasn't done as well as it expected to in the Middle Kingdom, where the smartphone market appears to be heating up into a battle between Apple, Samsung, and Chinese upstart Xiaomi.

Increased competition has also meant HTC has had to up its spending on marketing and product promotion, although the firm says it's trying to improve operating efficiency there and elsewhere.

HTC says it has done a thorough review of all of its properties and has identified a few "idled assets and prepaid expenses" that it has chosen to write down in the second quarter, which it expects to result in a one-time impairment charge of NT$2.9bn ($90m US).

The company says it has a four-pronged plan to reverse its flagging fortunes. First, it plans to make its smartphone business more competitive in unnamed ways. Second, it plans to cut costs and tighten its belt. Third, it plans to improve business processes and streamline its organization.

Finally, HTC says it now plans to "aggressively develop new business opportunities beyond smartphones." Sounds like it's about time. ®

Similar topics


Other stories you might like

  • Want to buy your own piece of the Pi? No 'urgency' says Upton of the listing rumours

    A British success story... what happens next?

    Industry talk is continuing to circulate regarding a possible listing for the UK makers of the diminutive Raspberry Pi computer.

    Over the weekend, UK newspaper The Telegraph reported that a spring listing could be in the offing, with a valuation of more than £370m slapped onto the computer maker.

    Pi boss, Eben Upton, described the article as "interesting" in an email to The Register today, before repeating that "we're always looking at ways to fund the future growth of the business, but the $45m we raised in September has taken some of the urgency out of that."

    Continue reading
  • JetBrains embraces remote development with new IDE for multiple programming languages

    Security, collaboration, flexible working: Fleet does it all, says project lead

    JetBrains has introduced remote development for its range of IDEs as well as previewing a new IDE called Fleet, which will form the basis for fresh tools covering all major programming languages.

    JetBrains has a core IDE used for the IntelliJ IDEA Java tool as well other IDEs such as Android Studio, the official programming environment for Google Android, PyCharm for Python, Rider for C#, and so on. The IDEs run on the Java virtual machine (JVM) and are coded using Java and Kotlin, the latter being primarily a JVM language but with options for compiling to JavaScript or native code.

    Fleet is "both an IDE and a lightweight code editor," said the company in its product announcement, suggesting perhaps that it is feeling some pressure from the success of Microsoft's Visual Studio Code, which is an extensible code editor. Initial language support is for Java, Kotlin, Go, Python, Rust, and JavaScript, though other languages such as C# will follow. Again like VS Code, Fleet can run on a local machine or on a remote server. The new IDE uses technology developed for IntelliJ such as its code-processing engine for features such as code completion and refactoring.

    Continue reading
  • Nextcloud and cloud chums fire off competition complaint to the EU over Microsoft bundling OneDrive with Windows

    No, it isn't the limited levels of storage that have irked European businesses

    EU software and cloud businesses have joined Nextcloud in filing a complaint with the European Commission regarding Microsoft's alleged anti-competitive behaviour over the bundling of its OS with online services.

    The issue is OneDrive and Microsoft's habit of packaging it (and other services such as Teams) with Windows software.

    Nextcloud sells on-premises collaboration platforms that it claims combine "the convenience and ease of use of consumer-grade solutions like Dropbox and Google Drive with the security, privacy and control business needs." Microsoft's cloud storage system, OneDrive, is conspicuous by its absence.

    Continue reading

Biting the hand that feeds IT © 1998–2021