HTC reported a record-low quarterly profit today that missed analysts' estimates, after it delayed the full launch of its 2013 flagship smartphone model, which will now debut against Samsung Electronics' newest Galaxy.
A shortage of cameras meant HTC managed to introduce its latest HTC One phone in just three markets by the end of the first quarter, instead of the planned 80. It does not expect to kick off sales across Europe, North America and the Asia-Pacific region before the end of April.
Samsung Electronics has said its Galaxy S4 will be available in 155 countries by the end of April. Last month, HTC said the HTC One handset would be available in SA this month, initially through Vodacom and Cell C.
The device features an aluminium unibody design and a 4.7-inch display. It runs on Android 4.2 Jelly Bean and supports LTE. Among the features are HTC's BlinkFeed home screen, which aggregates social media and news, depending on the user's preferences.
HTC said its unaudited net profit was T$85 million ($2.85 million) in its January-March first quarter, compared with T$1 billion in the prior quarter and T$10.9 billion in the same period last year. It was the lowest since HTC began reporting quarterly profits in 2004.
The Taiwanese smartphone maker was expected to post a net profit of T$467.5 million, according to the average forecast of 18 analysts polled by Thomson Reuters I/B/E/S.
First-quarter revenue was T$42.8 billion, lower than the T$50 billion to T$60 billion range that HTC had forecast in February. Revenue in the fourth quarter was T$60 billion. The company, founded in 1997, reported operating income of T$43 million, while earnings per share after tax were T$0.10.
Not enough
"As HTC failed to establish its brand image by selling its most important flagship phone on time, it'll be very difficult to push on the mid- and low-end phones when HTC launches them in Q3-Q4," said Dennis Chan, an analyst with Yuanta Securities, in Taipei. "Sales in the second quarter will bounce, but they will lose momentum again in Q3-Q4."
The company has partnered with Facebook, which unveiled new software last week called "Home" that replaces the home screen on some Android smartphones, and introduced a $100 HTC-made handset, HTC First, that is pre-installed with the new app.
The HTC First with Home by Facebook is a 4G-enabled handset, which allows Facebook subscribers to get updates and messages on the home screen.
"The Facebook phone is not enough to turn HTC around," said Daiwa analyst Birdy Lu, speaking before HTC's results were released. "Facebook Home could be only good for Facebook addicts, and the distribution channel for HTC First is very limited. HTC's 2013 performance is still highly dependent on HTC One."
HTC was the world's 10th-biggest smartphone maker by shipments in the fourth quarter, according to IT research firm Gartner, jostling in a crowded field behind the top-two heavyweights Samsung and Apple.
According to IDC, HTC does not feature in the top five smartphone vendors, which was dominated last quarter by Samsung and Apple. Some 219.4 million units were sold globally across all brands in the last three months of the year.
HTC was the fourth-largest handset manufacturer for the full year, selling 32.6 million of the total 712 million units, giving it market share of 4.6%, noted IDC in its latest handset tracker.
Shares of HTC have lost more than half of their value in the past 12 months, underperforming a slight rise in Taiwan's main TAIEX index. On Monday, HTC shares closed down 2.2% before the earnings were released, compared with a 2.4% fall in the main index. In intra-day trade, the stock was 2.23% down.
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