Apr 08 AT 3:59 PM Nick Gray 22 Comments

HTC One delays translate into lowest quarterly profits on record for HTC

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HTC profits fell to a new low in Q1 of 2013. The latest HTC earnings report shows that the company’s total revenues reached NT$42.8 billion with net income after tax shrinking to NT$85 million ($2.8 million USD), a 98.3% decline in profits from the $173 million which the company reported for Q1 of 2012.

HTC’s earning’s for Q1 were expected to come in lower than last year’s numbers, but the shortage of camera components which caused the delay of the HTC One helped push the company’s quarterly earnings over the cliff. Originally, the HTC One was scheduled for a global launch in mid-March, but HTC was only able to manufacture enough handsets for a limited retail launch in the UK, Germany and Taiwan. HTC has not confirmed if the HTC One camera module supply issues have been resolved, but the device is scheduled to launch in the US, Europe and Australia before the end of April.

These numbers show the production shortage really is that bad, and my sense is that it won’t get much better in the second quarter because many of those issues continue. For smartphones, timing is everything and the delay means they lose that timing.Dennis Chananalyst at Yuanta Securities Co.

We expect HTC’s number for Q2 to show a significant improvement, but the full effect of the HTC One launch will probably not be visible until HTC posts in Q3 earnings report later this year.

Will HTC be able to get back on its feet with the help of the HTC One or will the device be overshadowed by the impending launch of the Samsung Galaxy S 4?

Source: HTC

Nick is a tech enthusiast who has a soft spot for HTC and its devices. He started HTCsource.com (the first HTC blog) back in 2007 and later joined the Android and Me family in the summer of 2010.

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  • cj100570

    The failure of the One to be released on time has nothing to do with their profits in Q1 being the lowest ever. Even if it had launched on time it would have been too late for it to have had a big impact on Q1 profits.

    • Hom0ncruse

      final nail in the coffin for HTC

      • reddragonman

        I find this funny, because even though they have lower profits, they still had a profit!!! I don’t know why people think it’s such a big deal to always be increasing profit numbers. Yes, it shows relative health of a company, but as long as they are selling a profitable product, they’re doing fine. When that number starts going negative for a couple of quarters, then you may have a problem.

        • Web

          Sorry, but this is dead wrong. Initial sentence is like saying im walking on a flat street, so earth is a disc, not a globe, right?
          Profit is NOT a measure for financial health, especially when you can sell off your last assets to barely make any profits. Its not enough to earn $100 millions per year when you have to spend $500 millions on pensions…

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          • reddragonman

            Pensions and all other expenses are taken out before profit is calculated. Profit is used to attract more investors, since more profit equals more dividends. That is where profit is is important, since more profit means more investors, not in the way you’re looking at it. It IS a measure of financial health, which is why it is used by investors. And your analogy is completely off, since that wasn’t what I was saying at all. All I was saying was that they are still making a profit, which is always better than taking a loss…

          • Jimmy_Jo

            If they made $100 Million in profit and paid $500 Million in pensions, then that means they made $600 Million total and after the payout had $100 Mil left in profit. Unless they have some form of profit sharing (which is totally different from a pension) either way your statement is not factual.

        • Ichigo

          You cannot be serious… ” what’s the big deal of increasing profit….” Uh do you know HTC? Have you ever heard of that company? Yes? Ok then did you know that they have been on the decline for the past 2-3 years and I’d things keep going that way they will eventually have to be bailed out or sold? You’re retarded.

          • reddragonman

            No, I actually do know a thing or two about how corporate profit systems work. Yes, they’ve had declines in sales, but if they are making profit, they are not in financial trouble, probably due to adjusting to their current situation and laying off workers and ramping down production to adjust for their sales. Yes, increasing profit does help a company, but does not mean that they are in a downward spiral if they do not increase it. This is not a case like GM, where they were loosing money, in other words, a loss, not profit, and did nothing to change for the market conditions till it was too late.

          • http://htcsource.com Nick Gray

            If you’ve been paying attention to HTC, their profit numbers started going down 6 quarters ago. Not 8 and definitely not 12 quarters ago. The decline came after nearly 3 years of unprecedented growth. In early 2012, HTC opened a new factory with a yearly capacity of 40 million units. Since HTC’s sales are have gone down, HTC has not been able to fully utilize its production capacity, leaving the company with a high overhead cost that’s not being offset.

            The company is still profitable, but they need something to get them over this hump. HTC has essentially reached its break-even point. Breaking even is not bad if you’re a private company, but investors do not want to put their money into a company which is not going to make a profit.

    • http://htcsource.com Nick Gray

      Yes and no. If HTC wasn’t expecting the camera component shortage, they probably have components for a few million HTC Ones just waiting to be assembled. If HTC would have launched the One globally in mid-march, they would have sold at least an extra 1 million devices which would have brought in at least $300 million in revenue, a lot of which would have been profit since the cost of the components were already reflected in HTC’s Q1 earnings report.

  • redraider133

    Hope they have better results this quarter but the delays most likely aren’t going to help HTC

  • Co1e

    They cant get this phone out soon enough. Reviews are slowly starting to trickle out and they have me excited. They need to work on their marketing though if they want to break into the mainstream crowd that clamors almost exclusively for iphones and galaxies.

    • jamal adam

      I really hope they can spread their live experience marketing campaign/thing to more cities so that the average consumer can become more aware of the fact that the HTC One is an option and might be something they would want. Also, they can’t have anymore setbacks or problems otherwise that’s not gonna bode well for them.

  • roland

    HTC need to get this device send as many people hands as possible even if it means Lowing their price.

    • Arthur

      I don’t think lowering their price is an option at this point and will be seen as a desperation move to increase sales. Not to mention consumers will feel that HTC’s offering is inferior to Samsung’s after all that touting of the quality fit and finish and build materials.

  • pjamies

    Well they better pull that paddle out of their A$$ as they are going to need it for their canoe, which is quickly floating down stream!! lol

  • Clarence

    The HTC One was delayed specifically for Q2 profits as preorders were or are unusually high for the galaxy to have been dominating for so long.. April is the beginning of Q2.

  • HeadDoc

    This makes me sad. The 64GB One looks to be, in my opinion, the best phone ever made. Samsung will continue to eat their lunch for 2013, and HTC will end up trying to compete with the Pantechs of the world… kinda tragic.

  • donger

    HTC will get thru this.

  • Mobile and Dth Recharge Android App

    I find it a funny thing that even though the lowest earning from HTC one HTC still is in Profit. How
    They manage these kind of Profit.LOL

  • Paul Atreides

    DUN DUN DUNNNN!!!