HTC has, off late, become wary that it may make an operating loss, for the first time ever, in the third quarter, sending its shares down sharply. On Tuesday, it warned that it may swing to an operating loss as its revenue projections missed analysts forecasts. Most analysts had predicted a margin of between 2-4% and revenue of about T$72bn.
It said, “The margins were hurt by relatively higher cost structure as well as the lack of economy of scale. We expect our operating margin in the third quarter to fall to between zero and minus 8% on revenues of between T$50 to T$60bn ($1.7bn-$2bn; £1.1m-£1.3bn).”
HTC has, recently, lost market share to rivals such as Samsung and Apple. Its net profit dipped 83% in the Q2, from a year earlier. The shares have fallen 44% over the past 1 year. HTC is now trading at its lowest, since 2005. In an attempt for revival, it has launched new products, like the HTC One.
The company said, “With the help of HTC One, we have regained superphone market share across major markets including China. We plan to launch a range of innovative and competitive mid-tier products in the coming months, which will help us regain momentum and market share in these segments in the coming months.”
However, an analyst at Macquarie Securities, Daniel Chang, opines, “Though they expect an improvement in the fourth quarter, some analysts are sceptical, if it will be able to turn around things in the near-term. It doesn’t seem like the company has any strategy that can turn this around.“