HTC reported its detailed second quarter earnings and just as expected, the storm clouds just refuse to clear up for the company. Profits dropped by 58 percent, making last quarter its third consecutive quarter to see profits decline.
Profits were at 7.4 billion New Taiwan dollars, which sounds like a lot until you realize that only equates to $248 million. That’s down from the $585 million in the year-ago quarter. HTC also reported a 70 percent profit decline in the first quarter and a 26 percent profit decline in Q4 2011. Revenue for Q2 2012 was down by about 25 percent. The company achieved a gross margin of 25 percent — not horrible, but compared to the competition, not fantastic.
HTC’s guidance didn’t exactly get expectations too high, but this is just a sad mess. It’s predicting for the third quarter to have revenue between NT$70 and NT$80 billion, down 41 to 48 percent from one year before.
Even with its latest and greatest One series of Android smartphones — the One S and One X — HTC hasn’t been able to keep up with stronger competitors like the Apple iPhone 4S which is naturally kicking ass in terms of sales and Samsung’s flagship Galaxy S III is doing extraordinarily as well.
CFO Chang Chia-lin said the Chinese market “will be a key driving force for our future growth” and that HTC has to work harder to bring in customers. ”We will continue to invest in the future, but we will allocate resources to focus on key growth areas, such as production innovation, sales and marketing,” he added.