This article was published on August 3, 2012

HTC booked $3b in revenue in Q2 but expects a huge drop – of up to 22 percent – in Q3


HTC booked $3b in revenue in Q2 but expects a huge drop – of up to 22 percent – in Q3

Taiwanese mobile phone maker HTC this morning released (PDF) its final results for the second quarter of this year, reporting revenue of a little over $3 billion (NT$91.04 billion) for the three-month period.

Net income after tax was a mere $247 million (NT$7.40 billion).

HTC reported the (unaudited) numbers last month, so none of this should be news to you, but what’s new is that the company provided its outlook for the third quarter of 2012, and that really doesn’t look pretty.

For Q3 2012, HTC forecasts revenues to come in between $2.34 billion and $2.7 billion (NT$70 billion and NT$80 billion), which would represent a 22 percent drop at the low end of that range. At the risk of stating the obvious here: that’s not good.

HTC says it also expects gross margin to shrink from 27% to 25%, and operating margin from 9% to around 7% compared to the second quarter of 2012.

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Clearly, the company continues to have a hell of a hard time competing against Apple and Samsung.

In a statement, HTC says China is well positioned to become a key growth driver as its brand awareness grows and operator partnerships remain strong. It says Asia met expectation for growth since the One family launched in 2Q 2012, with sales across North and South Asia inline with expectations.

The company says it intends to ramp up marketing and sales efforts in the crucial North America & EMEA markets. If that will be enough remains to be seen.

In addition, HTC mentioned that it ‘continues to optimize organizational structure and resources to increase efficiency and competitiveness’ – which may mean reorganizations and layoffs down the line.

Also read:

Unable to compete with Samsung, HTC is closing its office in South Korea

HTC shuts down operations in Brazil following low sales and falling popularity

Facebook is working with HTC on a mobile phone for 2013 release

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