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Modest quarter for HTC: profits increased, but failed to meet analysts' forecast

HTC revealed its financial results for Q2 2013 – while the full launch of the One brought a modest increase in profits, the company failed to meet analysts’ forecasts.
July 5, 2013
HTC CEO Peter Chou (4)

Today HTC announced its revenue and profit for the second quarter of 2013, pouring cold water over some market watchers’ hopes for a turnaround.

Despite very good performance in May, the overall results in the quarter were dragged down by poor results in April, the month when the One was originally scheduled to launch, and June, when Samsung kicked the Galaxy S4 machine into high gear.

In Q2 2013, HTC brought in revenues of $2.35 billion, a sharp decrease compared to the same period last year, when revenues clocked in at $3.05 billion. On the bright side, the launch of the One and the good performance of the Butterfly allowed HTC to bag roughly $950 million more revenue than in the first quarter of the year.

In terms of profit, HTC again managed to end the quarter in the black; the company never ended a quarter with a loss in its entire existence. Profit in Q2 was a measly $41 million, compared to just $2.8 million last quarter. This time last year, HTC recorded a profit of $248 million.

HTC widely missed the forecast consensus

While revenue for the quarter was fairly healthy, almost reaching the levels from Q2 2013, analysts cited by Reuters had bigger expectations. HTC widely missed the forecast consensus, and, worse than that, the outlook for the next quarter is just a bleak.

Sales of the One already began to lose steam, while the Butterfly s has only been released in Taiwan so far. The Taiwanese company is expected to release a Mini variant of the HTC One in August, with an oversized Max version to follow in early autumn. Meanwhile, Samsung is powering ahead with the Galaxy S4 family and a myriad of other devices, while the Note 3 looms at the horizon.

To be fair, it’s not just HTC that’s doing badly financially. With demand for high-end smartphones waning, a weak global economy, and fierce competition, most players are suffering. Not even Samsung, the star of the industry, could beat expectations this quarter, despite record profits.