third quarter profit beats estimates as cost cuts offset weak sales
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[October 03, 2014]
TAIPEI (Reuters) - Taiwanese
smartphone maker HTC Corp swung to better-than-expected profit in the
third quarter from a heavy loss a year earlier, as cost cuts helped it
offset the impact of still-sluggish sales.
HTC said on Friday it earned T$640 million ($21 million) in
unaudited net profit during the July-September quarter, well above a
T$216.23 million mean estimate of 13 analysts polled by Thomson
Reuters. In the same period a year earlier, it turned in a loss of
The company makes devices, such as its flagship One M8, that
consistently garner accolades from critics but fail to lure
customers. The former contract manufacturer has struggled to
maintain a distinctive brand image in an increasingly crowded
HTC said during its last quarterly earnings briefing that improved
efficiency in its sales and marketing operations would help the
company maintain profitability in July-September after booking
losses in third quarter 2013 and the first quarter of this year.
Sales in July dropped 33 percent from the same month a year earlier,
but recovered to rise by 10 percent in August compared with the
year-earlier month, the company has said.
HTC's sales in September fell 7.9 percent on year to T$16.7 billion,
the company said in a separate release on Friday, adding
year-to-date revenue through September was down 13 percent to T$140
While HTC's sales slip, the overall smartphone market is buoyant.
Researcher IDC predicts worldwide smartphone shipments will expand
by 24 percent this year, while Silicon Valley powerhouse Apple Inc
moved a record number of new iPhones during the models' first
weekend of sales.
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Brisk business for the iPhone 6, which many view as the main
competitor to HTC's One M8, likely cut into HTC's sales in
September, SinoPac Securities analyst Calvin Huang wrote in a recent
Shares of HTC closed up 2.3 percent before the earnings release,
compared with a 1.5 percent gain in the benchmark TAIEX index.
(Reporting by Michael Gold and Faith Hung; Editing by Kenneth
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