HTC posts strong Q2 2014 earnings results, but still faces an uncertain future

August 4, 2014
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The end of July marks the release of Q2 earnings reports, and HTC is no exception. Unlike smartphone rival Samsung, HTC has faced a much more profitable second quarter of the year, although there have been deeps in both sales and profits over the past month.

HTC Q2 2014 at a glanceFirstly, looking at the quarter’s results a whole, HTC’s revenues and profits have increased substantially
compared with last quarter.

HTC’s Q2 revenues lept to NT$ 65.1 billion (USD 2.05 billion) from NT$ 33.1 billion (USD 1.1 billion), an impressive increase of 97 percent. However the yearly figures show a slightly different story, HTC’s revenues declined by 8 percent compared with Q2 2013.

Looking at profits, in the short term HTC appears to be turning things around, following a string of quarterly losses. Q2 2014 operating profits reached NT$ 2.4 billion (USD 80 million), defying three consecutive negative quarters. In percentage terms, operating profits at HTC are up 220 percent compared with the last quarter, and up 118 percent compared with the same quarter last year. This is a stark contrast to Samsung’s Q2 2014 performance, which saw smartphone profits decline by 31 percent over the last quarter, and 30 percent year on year.

HTC states that gains in revenue were driven by a strong market presence for the HTC One (M8) in the US and Europe, as well as a positive reception of the HTC One mini 2 in Europe. In Taiwan, the HTC One (M8) and Desire 816 performed exceptionally well, and the company’s extended product portfolio saw good momentum in China and India too.

HTC Q2 2014 Sales and Profit graph

However it has not all been smooth sailing for HTC. In July the company posted sales revenue of NT$10.6 billion (US$353 million), its lowest sales figure in the past five months, which includes the poor figures for Q1 2014. July sales fell by an astonishing 51.6 percent from the previous month, and declined 32.5 percent compared with the same month last year. The worry here is that the hard work put into to producing strong second quarter results could be short lived, and that sales for its new devices are falling off too sharply.

“Some of our products, after the initial excitement, have settled at a lower level. But the good thing is it is stabilized,” Chialin Chang – HTC’s Chief Financial Officer

As a result, HTC is expecting operating profits for the third quarter to fall back towards the same level as last year, somewhere in the region of NT$42 billion to NT$47 billion. This could well push profits back towards, or below, the break even point.

Despite a positive second quarter, HTC still remains in a more precarious position than other smartphone manufacturers. Sustainable profit margins and a strong product portfolio in the second half of the year will likely be the deciding factors as to how we judge HTC’s 2014.

Comments

  • Shark Bait

    back in the profit is good, they do make quality devices, which looks to be paying off.
    If they can price their E8 low enough they could really take some ground there too.

  • dandroid13
    • MasterMuffin

      Why is it bad news? More Android options for people to choose over iPhone is guuuud >:)

    • Will S.

      Why do you hate HTC soo much??

  • Gagandeep Singh

    HTC is no doubt has very unique position in android space.It has portfolio of beautifully built phones.HTC One original , M8 and Desire 816 are very well buit phones.

    I wish that HTC stays in android market.

  • Luka Mlinar

    No offense to them but their phones are just as overpriced as Samsungs.

    • Jesus

      Even more overpriced in my opinion.

      Samsung at least offers an array of extra software which justifies the price hike. But HTC? Not much extras from the Nexus 5.

      • Tuan Bui

        Yes because we love tw software so much.. Rather have quality over quantity. That’s what HTC offers.. Unlike Sammy. Throwing everything and half baked software. Not to mention bloat wares..

  • MasterMuffin

    And now to continue making more profit, M9 needs to:
    – Drop the ultrapixels unless they can get a decent MP count which I doubt
    – Drop the idea of 2 cameras, useless, focus more on the actual camera as said above
    – Drop the gold ;D
    – Have BIGGER BATTERY (well everyone should do that)
    – Keep the lovely design (if they can improve it I’m not against that), but take that HTC bezel away!
    And they need to keep focusing more on marketing, I liked it when I saw all those M8 ads on TV in Champions League

    • i_say_uuhhh

      Agreed with all!

    • Shark Bait

      Dual cameras are awesome!! HTC’s implementation isnt great but its a start. You can get:
      – optical zoom,
      – depth field,
      – 3D,
      – low light,
      – oversampling,
      – adjustable focus and more!

      They have the potential to be awesome, I cant wait for a real one to come out

      • MasterMuffin

        3D is sooo out :) You can get all of that with 1 camera

        • Shark Bait

          yeah but optical zoom is super interesting, i would like a bit of that

          • MasterMuffin

            Yea I see people moving away from their target abd then using digital zoom to take the picture >_<

          • Jesus

            Do you even know what optical zoom is?

            The M8 does not have optical zoom.

          • Shark Bait

            Never said it did

    • Android Developer

      bezels are indeed a problem on so many smartphones. I just don’t get why I need to see their logo for an entire empty row…

      • MasterMuffin

        In HTC’ case, they needed that room for internal parts so they put the HTC logo there to not have just a black empty area. They should’ve just evened the bezel on both sides of the display

        • Android Developer

          everything on the phone has internal parts…
          The G3 has a nicer screen-to-device size ratio.

          • MasterMuffin

            :) What I mean is they couldn’t just cut that bezel away because there wouldn’t have been room for all the stuff inside. They can rework the design and will probably have a bigger display for M9. And G3 is beautiful :)

          • Android Developer

            right.

    • Jesus

      Also:
      – Bezels. Lose them.

      – IP certificated water / dust proofing!!!

      Only then will I bless this phone. As of now, meh…

  • BatDroid

    Give HTC enough ammo, it will bomb apple into grapes.