HTC turns a profit in Q2 2014 due to HTC One M8 sales

On Thursday, Taiwanese manufacturer HTC announced they had generated a net profit of 2.26 billion New Taiwan dollars ($75.6 million USD) for Q2 2014. This marks an increase of 80% on the same quarter last year and is also a good sign following the company’s net loss of NT $1.88 billion in the previous quarter.

The Q2 profit seen by HTC actually exceeded expectations. A survey conducted with 16 financial analysts predicted that the company would generate a net profit of NT $2.09 billion.

HTC has attributed this return to profitability on the commercial success of their flagship HTC One M8 and the popularity of their mid range devices. The company also stated that they have been cutting costs and disposing of assets in order to become profitable. HTC CFO Chialin Chang stated the company was able to smooth out supply chain issues that were increasing expenses. Despite this good news, the company is still in rough waters.

While the HTC One M8 and other devices from the company are performing admirably, performance is still not optimal when compared to other manufacturers. HTC are still falling behind competitors such as Samsung and also low-cost Chinese manufacturers who have a stronger presence in the region. Some analysts are also concerned the company will come under more financial woes further into the year.

Apple and Samsung, who are undoubtedly HTC’s biggest competition are already gearing up to release a multitude of high end devices later this year such as the iPhone 6 and the Galaxy Note 4. These devices will no doubt draw attention away from HTC devices.

CIMB analyst Wanli Wang is predicting that HTC’s overall revenue could decrease to approximately NT $45 million over the second half of the year. He stated, “As features of Android phones are becoming more homogenous for consumers, their life cycle is now at best two to three months. I don’t see a clear catalyst for HTC in the second half of this year.”

 

 

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