HTC shares plunge on huge Q2 loss
Print Edition
SHARES in Taiwan’s smartphone maker HTC closed at their lowest level in more than a decade yesterday, a day after the company posted its biggest ever quarterly loss.
Stocks dropped by the daily limit of 10 percent to NT$63 (US$1.99) in the wake of disastrous results that prompted the firm to say it will take some models off the market as it seeks to cut costs.
Once the star of the intensely competitive smartphone sector, HTC has seen its fortunes collapse as Samsung, Apple and strong Chinese brands like Lenovo and Huawei have surged ahead.
HTC said on Thursday it had swung to a deep loss of NT$8 billion in the second quarter, from a net profit of NT$2.26 billion in the same period last year. It cited weak demand for its high-end products and poor sales in China’s mainland.
HTC is expected to stay in the red with the company forecasting loss per share to be as much as NT$5.85 in the third quarter — five times worse than previous estimates, Bloomberg said.
“HTC has begun to implement company-wide efficiency measures to reduce operating costs,” it said on Thursday.
“We are going to streamline and optimize our portfolio,” HTC chief financial officer Chang Chialin told investors.
“We are going after profitability instead of volume share,” he said.
HTC yesterday declined to say whether there would be job cuts as part of the cost saving strategy.
“Details of the cost reduction exercise remain confidential,” it said.
However, Bloomberg cited Chang as saying there would be “a headcount reduction” in some areas.
As global demand for smartphones declines, HTC has pinned its hopes on new product areas, like creating virtual reality experiences, including the headset HTC Vive that’s currently on a display tour in the United States and Europe.
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