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HTC net profit worse than expected in fourth quarter despite cost cutting HTC net profit worse than expected in fourth quarter despite cost cutting
(about 9 hours later)
Taiwanese smartphone maker HTC has reported a worse-than-expected net fourth-quarter profit despite aggressive cost cutting and more than £50m proceeds from selling its stake in the company behind Beats by Dr Dre headphones. Taiwanese smartphone maker HTC has reported a worse-than-expected net fourth-quarter profit despite aggressive cost-cutting and more than £50m proceeds from selling its stake in the company behind Beats by Dr Dre headphones.
HTC reported net profit of T$0.3bn (£6.1m), compared to a net loss of T$2.97bn (£60m) in the previous quarter and profit of T$1.01bn (£20.7m) in the same quarter of 2012. HTC reported net profit of T$0.3bn (£6.1m), compared with a net loss of T$2.97bn (£60m) in the previous quarter and profit of T$1.01bn (£20.7m) in the same quarter of 2012.
The figure lags expected net profit of T$721.71m (£14.7m), according to Thomson Reuters.The figure lags expected net profit of T$721.71m (£14.7m), according to Thomson Reuters.
The number highlights how quickly problems have piled up at a company that just over two years ago supplied one in every 10 smartphones sold around the world. The number highlights how quickly problems have piled up at a company that just over two years ago supplied one in 10 smartphones sold around the world.
The company, which has lost nearly three-quarters of its market value in the last two years, is now worth about £2.4bn, dwarfed by rivals Apple and Samsung Electronics. The company, which has lost nearly three-quarters of its market value in the past two years, is now worth about £2.4bn, dwarfed by rivals Apple and Samsung Electronics.
New management installed in the last quarter to tackle that slide must persuade customers the brand can still stand for stylish, feature-loaded phones, while keeping a lid on development costs.New management installed in the last quarter to tackle that slide must persuade customers the brand can still stand for stylish, feature-loaded phones, while keeping a lid on development costs.
Despite its latest flagship product, the HTC One, winning rave reviews, the company's global share of the smartphone market has declined to 2.2% in the third quarter of 2013 from a peak of 10.3% in the third quarter of 2011, data from research firm Gartner shows.Despite its latest flagship product, the HTC One, winning rave reviews, the company's global share of the smartphone market has declined to 2.2% in the third quarter of 2013 from a peak of 10.3% in the third quarter of 2011, data from research firm Gartner shows.
While the company's recent "Here's to Change" campaign has seen an advertising revamp featuring Iron Man star Robert Downey Jr, analysts remain skeptical about the firm's ability to differentiate its brand image.While the company's recent "Here's to Change" campaign has seen an advertising revamp featuring Iron Man star Robert Downey Jr, analysts remain skeptical about the firm's ability to differentiate its brand image.
The company has embarked on a cost-cutting campaign that includes buying its chips more cheaply and outsourcing production. It also sold its stake in headphone brand Beats Electronics, booking a one-time pre-tax profit of T$2.5bn (£51.8m), which would be recorded in the fourth quarter.The company has embarked on a cost-cutting campaign that includes buying its chips more cheaply and outsourcing production. It also sold its stake in headphone brand Beats Electronics, booking a one-time pre-tax profit of T$2.5bn (£51.8m), which would be recorded in the fourth quarter.
Shuttered factories, a wave of executive departures and top-level reshuffling are symptoms of what industry insiders see as the company's biggest problem: connecting with consumers. Shuttered factories, a wave of executive departures and top-level reshuffling are symptoms of what industry insiders see as HTC's biggest problem: connecting with consumers.
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