HTC Q1 Profit Plunges 98 percent Despite HTC One launch

Posted on 02 May 2013 at 1:09pm

The HTC One launched too late to save the Taiwanse company’s first quarter results, with net profit tumbling to NT$ 85 million ($ 2.85 million) from NT$ 4.5 billion ($ 152 million) a year ago, a drop of 98 per cent. It’s the company’s lowest quarterly profit since 2004. Revenue plunged too, to $ 1.45 billion from $ 2.2 billion, the company confirmed in today’s audited earnings call.

In January Chou said he believed the “worst for HTC has probably passed,” a sentiment borne out by the company’s stock rising steadily since the announcement of the HTC One. Analysts including HSBC and Daiwa last week upgraded their ratings of the Taiwanese company, citing the One’s strong reviews.

The phone recently received a coveted CNET.com Editors’ Choice award, with Brian Bennett praising its “stunning metal design, powerful quad-core processor, and beautiful 4.7-inch 1080p screen.” Nevertheless, it faced supply shortages at launch in March, with HTC blaming a lack of available components for the handset’s ‘Ultrapixel’ camera.

“HTC is still profit-making, but these results don’t bode well for the Taiwanese manufacturer,” said Ernest Doku, mobile analyst at uSwitch.com. “The One’s delayed journey to market was the most recent of its woes, while an array of handsets lacking in real market differentiation has seen the manufacturer struggle as Samsung’s Galaxy range has flourished. “Aligning with Facebook for the HTC First is a great step in terms of garnering media attention and drawing focus to its forthcoming mid-range effort, but it will need more than a strong handset and shrewd PR moves to reverse recent fortunes.”