Taiwanese mobile manufacturer HTC Corp (TPE:2498) has reported a Q4 net profit of $34.4 million, the lowest quarterly profit for the company since 2004. While still a tiny profit on more than a billion dollars in total revenue, $34.4 million is significantly higher than the consensus analyst estimate of $22 million for the quarter.
91% profit drop from 4Q 2012
Even though HTC Corp (TPE:2498)’s fourth quarter earnings were well above analysts’ expectations, the less than $35 million net profit represents a 91% decline from net profits in 4Q 2012. Fourth quarter 2013 marks HTC Corp (TPE:2498)’s fifth consecutive quarter of declining profits, and was less than 40% of the $79 million in net profits the company reported in the third quarter.
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Total revenues also continue to shrink at HTC Corp (TPE:2498), with revenues coming in at just over $2 billion in 4Q, a 41% decrease year-over-year
HTC Corp (TPE:2498)’s share of the smartphone market has been steadily shrinking for more than a year. Global smartphone device share for HTC was 4% in the third quarter of 2012 versus 10.3% for 3Q 2011, according to IDC. Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s global market share has steadily increased to 31.3% as of the end of September 2013, and Apple Inc. (NASDAQ:AAPL)’s total market share remains above 15%.
Declining sales from HTC Corp (TPE:2498)’s flagship HTC One are the major reason for the sales slump. The company introduced its Butterfly smartphone in Japan halfway through the fourth quarter, and early reports about the device are generally positive. The new Butterfly phone offers a large, high-resolution 5-inch screen, which the company plans to include in other models in the near future.
Despite declining sales, Peter Chou, CEO of HTC Corp (TPE:2498), told The WSJ in an interview that he is optimistic about the future of the company at this point. “The worst for HTC has probably passed,” Chou said. “2014 won’t be too bad.”