HTC shares hit hard by Q2 results

Taipei, Aug. 14 (CNA) Shares of Taiwan-based smartphone brand HTC Corp. (宏達電) took a beating Monday after the company incurred a net loss in the second quarter of this year for the ninth consecutive quarter, dealers said.

“The heavy downward pressure faced by HTC shows that investors rushed to get away from any stock with negative leads for the moment, when the equity market has been haunted by political tension between the United States and North Korea,” Hua Nan Securities analyst Kevin Su said.

“The poor second-quarter results gave investors a good excuse to cut their holdings in HTC shares throughout the session,” Su said.

Shares of HTC fell 9.06 percent to close at NT$62.20 (US$2.05), with 26.12 million shares changing hands on the Taiwan Stock Exchange, when the weighted index ended down 1.01 percent at 10,225.28.

The stock encountered heavy selling soon after the local equity market opened, in a knee-jerk reaction to its second-quarter results, and the downturn escalated, with pressure intensifying in particular in the latter part of the session to push its share price down more than 9 percent at the close, the dealers said.

In a statement released Friday, HTC said that it posted NT$1.95 billion in net loss, with loss per share at NT$2.37. Although the latest quarterly loss was slightly narrowed from NT$2.03 billion in net loss for the first quarter, the smartphone vendor recorded a net loss for the ninth consecutive quarter.

HTC said that its consolidated sales for the second quarter rose 11 percent from a quarter earlier to NT$16.1 billion after it unveiled its latest flagship, the HTC U11, in May. The HTC U11 was chosen as “best overall” smartphone costing less than US$700 by tech news website Android Central in July.

According to HTC, the flagship model, with an ultra high-definition 5.5-inch display, represents the company’s efforts to innovate, since the device is equipped with an “Edge Sense” function that allows users to squeeze the phone to activate features such as the camera, Facebook, or other apps.

“However, HTC’s smartphone operations remained in the doldrums as it still faced stiff competition in the high-end segment from Apple Inc. and Samsung Electronics Corp.” Su said. “In the low and mid-range segment, HTC failed to outsell Chinese rivals such as Xiaomi (小米) and Huawei (華為),” Su said.

“It was no surprise that its bottom line failed to make a significant improvement in the second quarter,” Su said.

HTC’s gross margin for the second quarter fell to 13.7 percent from the first quarter’s 16.3 percent, but beat 11.4 percent recorded over the same period of last year, the company said.

In the first half of this year, HTC’s loss per share stood at NT$4.85, compared with NT$6.87 in loss per share seen a year earlier.

HTC, which has entered the virtual reality business by launching the VR headset HTC Vive to diversify its product mix to offset the impact from rising competition in the global smartphone market, said that it has teamed up with foreign tech giants such as Google, Intel and Apple to push for VR ecology development since the second quarter.

[“Source-focustaiwan”]