HTC Forecasts Tough Holiday Season With Significant Reduction In Q4 Revenues

On Tuesday, HTC (TPE:2498), the Taiwanese smartphone maker released consolidated results for the third quarter of this year, and reported a $102 million loss during the period. The company posted a quarterly revenue of NT$47 billion ($1.6 billion), with a gross margin of 20.4 percent and a negative operating margin of 7.4 percent.

“We have delivered good progress in the third quarter,” Peter Chou, CEO of HTC, said in a statement, “with the introduction of HTC One Mini and One Max, we now have an HTC One for everyone.”

Chia-Lin Chang, HTC’s chief financial officer, also pointed out that the HTC One handset continues to outperform last year's HTC One X, and is expected to do so in the fourth quarter as well, The Verge reported.

However, the company is not expecting to make any significant improvements to revenues in the fourth quarter, which includes the lucrative holiday season.

During the fourth quarter in 2012, HTC reported a NT$1 billion ($34 million) profit from NT$60 billion ($2 billion) in revenues, with a gross margin of 23 percent. But, in the same period this year, the company expects to generate revenues in the range of NT$40 billion to NT$45 billion ($1.36 billion to $1.53 billion), representing a year-on-year decline in the range of 25 percent to 33 percent.

In addition, HTC also said that its gross margin for the next quarter could drop to about 20 percent while earnings per share are expected to be around NT$0.01 - NT$0.06.

In October, Cher Wang, HTC’s chairperson told Bloomberg that the fourth quarter would be the “biggest challenge” for the company as it would be competing against new offerings from industry leaders, such as Apple (NASDAQ:AAPL) and Samsung (KRX:005935).

The company said in July that it would release more competitive mid-range products in coming months, and expressed hope that its new products would help the company “regain momentum and market share in these segments in Q4.”