HTC Corp. Fourth Quarter Earnings Misses Street Estimates

HTC Corp. (TPE:2498) reported lower-than-expected earnings for the fourth quarter of 2013. The Taiwanese smartphone manufacturer said its net income was NT$ 310 million or $10 million compares with NT$ 694 million average estimates of Wall Street analysts based on data compiled by Bloomberg. Its earnings per share was NT$0.38.

The Taiwanese smartphone manufacturer posted NT$ 1.56 billion operating loss (unaudited), lower than the NT $1.72 billion average operating loss estimated by analysts. HTC Corp (TPE:2498) had been reporting disappointing sales over the past nine quarters, and the fourth consecutive quarter that its profit missed analyst estimates.

In a note to investors, Kylie Huang, analyst at Daiwa Securities Group in Taiwan opined, “The weakness in top-line was due to the lackluster demand of its new flagship model HTC One Max and the mid-range Desire-series models.”

Huang also added, “We view 2014 could be a worse year for HTC as the benefit from the cooperation with China Mobile and its recent changes, if any, could be offset by the fiercer competition from leading OEMs and China brands.”

HTC Corp (TPE:2498) introduced One Max in October. The device sports a 5.9-inch screen integrated with biometric security or fingerprint scanner, Snapdragon 600 processor from Qualcomm Inc (NASDAQ:QCOM), the HTC BoomSound and Ultra Pixel Camera, and powered by the Android operating system from Google Inc (NASDAQ:GOOG).

The company also hired Hollywood actor, Robert Downey Jr. to promote its brand. In addition, the company also launched its 4G devices in partnership with China Mobile Ltd (ADR) (NYSE:CHL). However, the strategies failed to lift its declining market share.

According to Gartner, an information technology research and advisory firm, the market share of HTC Corp (TPE:2498) in the smartphone industry worldwide dropped from its peak at 10.3% to 2.2%.

HTC Corp (TPE:2498) managed to meet the expectation of analysts only once over the past two years, according to data from Bloomberg. The company sold its 24.84% stake in Beats Electronics LLC for $265 million in September. The company recorded $85 million pre-tax profit from the transaction and repaid a $150 million promissory note with interest.

Recently, the company lost a patent case against Nokia Corporation (ADR) (NYSE:NOK) in Germany, and it is likely to face a sales ban on all its Android devices including the HTC One series .