Don’t call it a comeback. HTC is hardly out of the woods, but the troubled Taiwanese company can finally give investors some reasons to buy its stock.
HTC issued its guidance for Q2 2014, and it’s largely good news. The company expects to double its revenue compared to last quarter, to between NT$65 billion (US$2.16 billion) and NT$70 billion (US$2.32 billion). That would translate to a gross margin of 21.3 percent to 22.0 percent, and earnings per share of NT$2.21 to NT$3.00.
Last quarter, HTC recorded a marked slowdown in sales, ahead of the release of the new One (M8), which resulted in losses of NT$1.88 billion ($62 million), worse than the predictions of many analysts.
The One (M8) outperformed the sales of the M7 in the same period last year, said Jack Tong, President of HTC North Asia. The company says it had “solid” sales in Europe, Middle East, and Africa, thanks largely to the M8, as well as “strong momentum” in India and China. The M8 and the Desire 816 were HTC’s sales engines in these regions. In some Asian markets, demand for the One (M8) was greater than the supply, said Tong.
We believe that we are on course for a strong 2014
“We believe that we are on course for a strong 2014,” stated CEO Peter Chou, noting that the expansion of LTE in Taiwan and China opens opportunities for HTC. “We have dramatically improved our operational efficiency and supply chain readiness,” said the exec. HTC began outsourcing some of its manufacturing this quarter.
These signs are certainly encouraging, but HTC can’t relax just yet. In Q2 of last year, HTC had revenues of US$2.35 billion, so, unless the company beats its guidance, there won’t be any growth year on year.
Related: List of the best HTC One (M8) cases