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HTC’s Q1 2015 earnings exceed expectations
HTC has announced another profitable quarter, claiming an unaudited net profit of NT$360 million (USD$11.6 million), up from the net loss of NT$1.88 billion posted at the same point last year. Much like Samsung’s report, HTC has exceeded analyst expectations for the first quarter of the year.
The company was expected to declare NT$155.5 million in net profit for Q1, according to a ThomsonReuters poll of analysts, which was handily beaten. Revenues ending March 31st reached NT$41.52 billion, greater than the NT$33.12 billion generated a year earlier but behind the NT$47.9 billion from Q4 2014. As a result, profits were down slightly from Q4 2014’s NT$466 million (USD$14.67 million). HTC is barely hovering in the profit zone, but is showing improvement from the consecutive quarterly losses of a year ago.
Importantly, the One M9 flagship has not yet had an impact on HTC’s figures. A survey of analyst forecasts puts second quarter profit expectations at a much healthier NT$1.97 billion, with a revenue of NT$66.10 billion. However, HTC will be looking to buck the trend of previous years, where it has been unable to sustain momentum for its flagship in subsequent quarters. Instead, analysts suggest that growth in the Desire series may continue to prop up revenue levels this year, although the mid-range market has become increasingly competitive.
In a bid to improve profitability, HTC is said to be looking to boost production volume to help lower overhead costs. The company has also been branching out into new products markets. Both the RE Camera and Vive virtual reality headset are helping the company probe new revenue streams and a change in leadership at the top may give HTC a refreshed perspective this year.
Unfortunately for HTC, the company is no longer one of the world’s largest smartphone manufacturers. Success this year will likely hinge on the longer term appeal of its One M9 and reaching new customers with its mid-range Desire series and spin-off products.
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