HTC cautions that it may post loss in Q3, says it's working to improve itself and its mid-tier lineup

Alex Wagner
Editorial Director of News and Content from  Omaha, NE
| July 30, 2013

HTC One bottom

The second half of our one-two earnings punch this morning comes to us thanks to HTC. The Taiwanese manufacturer today reiterated its results for the second quarter of 2013 and provided a somewhat gloomy outlook for Q3. During Q2 2013, HTC earned a total revenue of NT$70.7 billion ($2.36 billion USD) and a net profit of NT$1.25 billion ($41.77 million USD). HTC also notes that it ramped up device production in Q2, including sequential growth in the U.S., and expansions in retail channels.

HTC also took a moment to touch on the One, its current flagship smartphone. The company says that the One has been doing "well" and is actually performing better than its hero products did during the same time last year. However, HTC didn't provide specific sales numbers.

Looking ahead, HTC has forecasted a bit of a bumpy Q3 2013 that could include an operating margin of 0 to -8 percent, meaning that the company could see a loss for the quarter. HTC says that its overall gross margin has been affected by factors such as "the relatively higher cost structure, lack of economy of scale and certain provisions needed to facilitate the clearance of aging products in the channel." The firm promises that it's taking action, though, and that we should see an improvement in Q4 2013's numbers.

HTC also said that it's planning to launch "innovative and competitive" mid-range products in the coming months in an effort to increase its presence in that product segment. No details on the products were given, but it seems likely that at least one of those devices is the recently-announced HTC One mini. HTC says that it's working to to improve itself as well, making tweaks to improve the efficiency and effectiveness of its management.

HTC has been having a rough go in recent quarters, and with today's Q3 operating margin forecast, it looks like we might see that bumpy ride continue into the next couple of months. Despite the fact that the One sounds like it's doing well for HTC, it still must compete against other smartphone heavyweights like the Samsung Galaxy S 4 and Apple iPhone 5, and as a result the One is having a hard time keeping HTC in the black. The good news is that HTC's planning to release the hotly-anticipated One mini in the coming months to aid the One in its efforts. Now we just have to wait and see what kind of backup support it can provide.