TAIPEI: Taiwan's leading smartphone maker HTC said Tuesday it may swing to a loss in the third quarter after reporting an 83 percent fall in net profits in the three months to June due to higher costs and inventories.
Its net profit totalled Tw$1.25 billion ($41.67 million), compared with Tw$7.4 billion recorded the previous year, while revenue fell 22 percent year-on-year to Tw$70.7 billion, the company said in a statement.
But the worst is yet over as the company forecasted that its quarterly sales in the third quarter will slow to a range of Tw$50 billion-Tw$60 billion and operating margin to a range of 0 percent to negative 8 percent.
"Our overall gross margin has been impacted by the relatively higher cost structure, lack of economy of scale and certain provisions needed to facilitate the clearance of aging products in the channel," it said.
As part of its efforts to refrain from slipping into a loss, the company eyes more mid-tier smartphones as analysts have warned of weak demand for high-end items.
"We also have plans underway to launch a range of innovative and competitive mid-tier products in the coming months. We hope to regain momentum and market share in these segments in Q4.
This will address our challenge of mid-tier products competitiveness," it said.
According to research firm IDC, HTC held a 4.6 percent share of the global smartphone market in 2012, a sharp decline from 8.8 percent a year earlier. Samsung held a 30.3 percent stake while Apple had 19.1 percent.
indiatimes.com
Its net profit totalled Tw$1.25 billion ($41.67 million), compared with Tw$7.4 billion recorded the previous year, while revenue fell 22 percent year-on-year to Tw$70.7 billion, the company said in a statement.
But the worst is yet over as the company forecasted that its quarterly sales in the third quarter will slow to a range of Tw$50 billion-Tw$60 billion and operating margin to a range of 0 percent to negative 8 percent.
"Our overall gross margin has been impacted by the relatively higher cost structure, lack of economy of scale and certain provisions needed to facilitate the clearance of aging products in the channel," it said.
As part of its efforts to refrain from slipping into a loss, the company eyes more mid-tier smartphones as analysts have warned of weak demand for high-end items.
"We also have plans underway to launch a range of innovative and competitive mid-tier products in the coming months. We hope to regain momentum and market share in these segments in Q4.
This will address our challenge of mid-tier products competitiveness," it said.
According to research firm IDC, HTC held a 4.6 percent share of the global smartphone market in 2012, a sharp decline from 8.8 percent a year earlier. Samsung held a 30.3 percent stake while Apple had 19.1 percent.
indiatimes.com
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