HTC issues warning – revenues, profit margin expected to decline in 4th quarter

For Android fans, today has been a day to enjoy mostly good news in terms of the continued growth of the Android ecosystem. We see that Android tablets grabbed 41% market share for the third quarter, an unexpected jump in light of Apple’s dominance in the market segment. Meanwhile, Samsung reported phenomenal third quarter profits, setting records for smartphone shipments and establishing themselves as the worldwide leader in smartphones. However, not all of the news is coming up roses. Case in point, new guidance from HTC which should serve as a warning about how quickly things can change.

HTC issued their warning Friday, indicating they expect further declines in operating profit margins and revenues during the fourth quarter. We previously reported on HTC’s third quarter financial results which continued a string of disappointing quarters. These results are a contrast to HTC’s spot as one of the top five smartphone manufacturers in the world and their former position as Apple’s chief rival in the U.S. market only two years ago. According to HTC, they expect operating profit margin to drop to only 1%, the lowest it has been in a decade. Meanwhile, they anticipate fourth-quarter revenue to fall 41% compared to the same period a year earlier. These latest projections are worse than analysts previously expected.

Do you think HTC can turn things around?

source: NASDAQ

About the Author: Jeff Causey

Raised in North Carolina, Jeff Causey is a licensed CPA in North Carolina. Jeff's past Android devices include an HTC EVO, a Samsung Note II, an LG G3, and a Motorola Moto X Pure Edition along with a Samsung Galaxy Tablet 10.1. He currently uses a Samsung Galaxy S8 and (very rarely) a Nexus 7 (2013). He is also using a Verizon-branded Motorola Moto Z Play Droid supplied by his job. Jeff used to have a pair of Google Glass and a Moto 360 Sport in his stable of gadgets. Unfortunately, his kids have all drunk the Apple Kool-Aid and have i-devices. Life at home often includes demonstrations of the superiority of his Android based devices. In his free time, Jeff is active an active runner usually training for his next marathon, owns a MINI Cooper, and plays Dungeons & Dragons. Jeff has three mostly grown kids and a golden retriever.

  • RTWright

    HTC has what it takes to turn it around, but are they willing? They need to look at the reasons why they are failing and go from there. Look at the competition, mainly, Samsung. Their devices are not as closed out to customization as theirs has become. The GS 3 for instance can be purchased with a wide variety of Memory choices ( 16, 32, 64 internal ) and upgradable by SD Cards to even more. I mean, you’d think that a lot of people wouldn’t mind it not being able to upgrade themselves, but apparently they do.

    Also look at all the different design options ( Colors of the devices, I know this is aesthetic but still ), there are a lot of other things they should consider sa well. I had an HTC Evo 4G and loved it for the time I had it, but it could have been better supported over the time too. They dropped the ball in support of a flagship device then. That itself left a bad taste with quite a few users of their devices. So yes, they need to take lessons from others this time around and learn that it’s more important to be flexible than stagnate!

  • Phud

    I used to be a big fan of HTC buying their latest flagship phone as it came out. That stopped with the HTC Sensation. I became aware that HTC did not prioritise battery life,(one of their execs was quoted as saying customers could just charge their phones during the day). That was it for me. I want a good battery life and influenced by the Samsung Note’s 2500 mh battery switched to that and frankly now do not even consider a phone with a screen of less than 5in.