HTC Suffers Another Bad Quarter- Profits Down 83%

[TheLibertarian]

No, they're not. I found the S4 screen to be more than bright enough, and so have a lot of others.

Still, I'm disappointed to hear this about HTC. I was hoping the One would be giving them a better time.

The S4's display is one of the dimmest of the leading smartphones, as was the S3's display.

That's a measured statistic, not an opinion.

 

[josearmz10789]

The S4's display is one of the dimmest of the leading smartphones, as was the S3's display.

That's a measured statistic, not an opinion.

My S4 is bright enough for me. Even in daylight and if that was an issue it wouldn't be selling well.

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[josearmz10789]

No doubt the one is a great phone and a great alternative to the S4, but its hard for one phone to undo all the damage left by other handsets. The DNA is one of the best looking phones, way better than the one in my opinion, but somehow it didn't sell well. What killed htc was the first so a good strategy would be to get a line like the Galaxy or Optimus series and focus on that.

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[TheLibertarian]

My S4 is bright enough for me. Even in daylight and if that was an issue it wouldn't be selling well.

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I'm sure there are many people that are happy with the display, but that was not my point. I was supporting a prior poster who stated the display is dimmer, because, factually, it is. That was a big complaint on the GS3.

 

[Farish]

Maybe this is lost in this thread or nobody saw this clearly because they think about it in terms of their device.

The HTC One is a wonderful phone.

The HTC Corporation has terrible management that has fumbled too many times in the last 3 years.

 

[Habiib]

Maybe this is lost in this thread or nobody saw this clearly because they think about it in terms of their device.

The HTC One is a wonderful phone.

The HTC Corporation has terrible management that has fumbled too many times in the last 3 years.

Thankfully most of them are now gone

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[josearmz10789]

I'm sure there are many people that are happy with the display, but that was not my point. I was supporting a prior poster who stated the display is dimmer, because, factually, it is. That was a big complaint on the GS3.

I see but then again its good enough for more people and others are into having deeper blacks than whiter whites.

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[Marck527]

Meanwhile Samsung apparently shipped more than 20 m units of the s4,making it the most sold android phone in history.

http://m.huffpost.com/uk/entry/3540811

Although I use an s4,im very sad for HTC, without competition, we wouldn't get the device we have right now.

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[srkmagnus]

I'm hoping things start turning around for HTC. Although there are a good number of OEMS in the Android market, HTC has had a huge impact and helped innovate many of the devices we use today.

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[russel5150]

So I bought lunch the other day, paid with a twenty and my change was 17.76... what are chances on Independence Day weekend!!! :thumbup:

Do the profits have anything to do with tje fact that a phone company tries to release a flagship style phone at least once a year but the majority of people buy these phones on two year contract to get them cheaper? With verizon and att saying they are tightening up their early upgrades how can a company expect this years phone to sell so well when a lot of average customers still have a year or close to it to wait..
I love having an awesome phone but my budget doesnt allow me or prob a lot of people to just buy at full price every other year.

Make sense?

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[TheLibertarian]

So I bought lunch the other day, paid with a twenty and my change was 17.76... what are chances on Independence Day weekend!!! :thumbup:

Do the profits have anything to do with tje fact that a phone company tries to release a flagship style phone at least once a year but the majority of people buy these phones on two year contract to get them cheaper? With verizon and att saying they are tightening up their early upgrades how can a company expect this years phone to sell so well when a lot of average customers still have a year or close to it to wait..
I love having an awesome phone but my budget doesnt allow me or prob a lot of people to just buy at full price every other year.

Make sense?

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Doesn't really make sense as the entirety of the United States does not upgrade during the same time frame.

 

[xlDeMoNiClx]

Meanwhile Samsung apparently shipped more than 20 m units of the s4,making it the most sold android phone in history.

http://m.huffpost.com/uk/entry/3540811

Although I use an s4,im very sad for HTC, without competition, we wouldn't get the device we have right now.

Sent from my GT-I9500

Shipped doesnt equal sold.

Posted via Android Central App

 

[Aquila]

Shipped is the only number we get consistently from OEMS whatever they call it... How is 20 mm units the highest in history? It's not even the fastest pace, but s3 and iph5 both total higher so far.

Transmitted through spacetime.

 

[Nreeldeep]

Really? No sales?

The article isn't about sales, I don't know if you noticed. We know that the One is selling well. HTC's problems have little to do with the One but rather past mismanagement.

Of course, we also know the other major Android maker is dealing with disappointing profits and sales.

The article isn't about sales? Uh...What is profit? How do you achieve profit? Through sales, no? Profit=sales. No profit=no sales.
1.2 million sales in the second month is anemic. We don't even know how much they sold in June yet, but you can bet it was below the 1.2 million in May based on the 83% freefall in June.
The "other major Android maker" just become the best selling Android device over its first 2 months in history by selling 20 million units, and it's profits are down as well, as you alluded to. But obviously not down 83%.
83%. Ouch! Just think how much the "other major Android maker" would have pocketed had they not also had a market downturn.

 

[RenoD2010]

The article isn't about sales? Uh...What is profit? How do you achieve profit? Through sales, no? Profit=sales. No profit=no sales.

Completely incorrect. Profit DOES NOT equal sales. Sales, more commonly referred to as revenue, is at the TOP of the income statement. There are THREE types of profit: Gross, operating and net. The first is a measure of how much you make on the stuff you sell. The second is a measure how much you are spending on operations vs gross profit and net profit (the "bottom line" ) is an efficiency measure.

It is completely possible to have higher sales and lower net profit if you, say, spent more on marketing or took any kind of non-cash loss.

A more meaningful measure would be tracking EBITDA (earnings BEFORE interest, taxes, depreciation and amortization) especially as the last two are non-cash expenses.

Profit, net profit, being down 83% DOES suck but at least HTC IS profitable. Get really worried when it closes its fiscal year with deficit cash flow.

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[Aquila]

Completely incorrect. Profit DOES NOT equal sales. Sales, more commonly referred to as revenue, is at the TOP of the income statement. There are THREE types of profit: Gross, operating and net. The first is a measure of how much you make on the stuff you sell. The second is a measure how much you are spending on operations vs gross profit and net profit (the "bottom line" ) is an efficiency measure.

It is completely possible to have higher sales and lower net profit if you, say, spent more on marketing or took any kind of non-cash loss.

A more meaningful measure would be tracking EBITDA (earnings BEFORE interest, taxes, depreciation and amortization) especially as the last two are non-cash expenses.

Profit, net profit, being down 83% DOES suck but at least HTC IS profitable. Get really worried when it closes its fiscal year with deficit cash flow.

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This article also doesn't address the margins at all, as a percentage of income, etc. unless we're to assume expenses were flat. Basically it just says they made 41 million in profit in Q2 2013 an d50 million in profit in Q2 2012. But 41 million could easily be representing a higher pretax margin or gross operating margin than the 50 million from the previous year over year, if they spent more to get the 50 million in 2012 and lowered expenses in 2013. Or they could have done the reverse in expenses, in which case the margins are considerably worse.

Profit as a dollar amount compared year over year means very little to anyone unless you're a shareholder trying to calculate your share growth or decline. The general health of the organization can be more accurately represented by the ratio of profit to revenue.

But since they are kind enough to give us these numbers we can get all of the data we need easily enough. Not sure why the reporters or analysts didn't do this.

According to a combination of HTC's investor site and this article,

in Q2 2012 HTC had:
$3.03 billion in Revenue
$2.98 billion in Expenses
$50.2 million in Profit
1.66% Gross Margin

in Q2 2013 HTC had:
$2.35 billion in Revenue
$2.31 billion in Expenses
$41.6 million in Profit
1.77% Gross Margin

While the dollar amount decreased by the quoted 83%, the margin as a ratio has actually increased by 7%, meaning they're getting more bang for their buck. So yeah they brought in $677 million less in revenue, but they also decreased expenses by $669 million and only show the $8.5 million less year over year in actual profits not going to shareholders. 83% only sounds really bad when you don't know what it means.

For added info, in Q2 2011 HTC had $4.14 billion in revenue, 2010 was $2.01 billion, 2009 $1.27 billion and 2008 $1.15 billion. That trend line is pretty positive for the last 6 years, with each of the highest 3 being in the last 3 years. It's really only in the context of 2011 that 2013 looks terrible, but 2011 was almost as high as the previous 3 years combined, so it could be said to be an outlier.

Are you more interested in investing in a company that spends $10 to make $8 in profit or one that spends $2,000,000 to make $8 in profit? Your split is the same assuming equal number of shares, etc... but one of those is much more high risk to investors.

 

[Farish]

Their financials are more about bad management when it comes to strategic vision and marketing.

The thing is though, usually when a company has drop like this, the CEO should be fired/stepping down.

Either the Board has bought into his plan or they don't have the votes/he controls the votes that could remove him.

 

[JHBThree]

Their financials are more about bad management when it comes to strategic vision and marketing.

The thing is though, usually when a company has drop like this, the CEO should be fired/stepping down.

Either the Board has bought into his plan or they don't have the votes/he controls the votes that could remove him.

Or...the board realizes that their troubles are a combination of multiple issues, the largest of which is completely out of their control.

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[Farish]

Or...the board realizes that their troubles are a combination of multiple issues, the largest of which is completely out of their control.

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While dealing with this uphill battle, he is still optimistic and said in a recent interview that he won?t be quitting his role as CEO at HTC anytime soon.

I know you guys want to ask, will I quit. There are a lot of rumors that say I would quit, but I never said that. I?m not going to find another job.

When companies take large dives such as this and can?t seem to get back on the right track with a winning formula, it is not uncommon to see a changing of the guard. According to an interview with one of HTC?s board members, David Yoffie, not a single time has a discussion been made about removing Chou from power. ?The board has a lot of confidence in Peter, and share price is not going to drive decisions on the future of the chief executive.?

That maybe the case but the pressure will grow to a point where they have no choice if they continue. Only concern for them is the HTC One on Verizon maybe a little too late now.

 

[JHBThree]

That maybe the case but the pressure will grow to a point where they have no choice if they continue. Only concern for them is the HTC One on Verizon maybe a little too late now.

They won't be making any changes until after the holiday season. By then they'll know if the S4 falls flat on its face Iong term, which would give them an opening.

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