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HTC makes a small Q3 profit, just about keeps recovery on track

HTC has announced a small profit of NT$0.6 billion for Q3 2014, a major improvement over last year's quarterly loss of NT$3.5 billion.
October 31, 2014
HTC One E8 Brand Logo 4

After posting a string of successive quarterly losses, Q2 marked the potential start of a turnaround for HTC. The true test of a change in fortunes would come in the following months and HTC has just managed to post a small profit for the third quarter.

Revenue for the quarter came in at NT$41.9 billion ($1.38 billion), resulting in a net profit after tax of NT$0.6 billion ($20 million). HTC’s operating margin was relatively low, at just 0.4 percent, but the company has managed to stay out of the red this time around.

Although profits may be slim, HTC looks to be in a much better place that it was the same time last year. In Q3 2013 the company posted an operating loss of NT$3.5 billion, despite collecting revenues worth NT$47 billion.

HTC Profit Q3 2014

HTC looks to be a leaner business these days and managed to turn a profit from lower levels of revenue. HTC has accomplished this through a 36 percent reduction in sales and marketing expenditures and a 48 percent cut in general administration costs, when compared with the same time last year.

In terms of smartphone sales, HTC declared strong demand for its Desire range of handsets. The 610 and 510 are apparently selling well in Europe and the US, and the Desire 816 maintained solid sales throughout Taiwan, China, India and the Middle East. The flagship HTC One (M8) still seems to be moving units too.

Come the end of the year, HTC is anticipating revenues somewhere between NT$43 billion to NT$47 billion and therefore similarly small levels of profit. However, this slow and steady approach could see HTC well placed to make a healthy profit come next year’s flagship smartphone launch.