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HTC learns lessons from disappointing One M9 debut

HTC One M9

After four straight profitable quarters, HTC may once again be facing unfavourable financial straits.

On Friday, the company issued an unaudited version of its second quarter results. In it, HTC says it may once again be out of the black. Prior to this latest report, the Taiwanese company had expected to see revenues between $1.48 billion and $1.56 billion USD this quarter. Instead, it’s now expecting to see those numbers drop to somewhere between $1.06 and $1.66 billion USD. It goes on to say that it expects an operating loss between $257 million and $291 million USD.

HTC doesn’t say it in so many words, but the weak performance of the One M9 is the likely culprit for the company’s recent financial woes. In the report HTC says it will incur a one-time expense for “idled assets” of $93 million, which suggests that it likely overestimated demand for the One M9 and is now on the hook for all the extra units it asked its manufacturing partners to produce.

“In recognition of prevailing market conditions, HTC has embarked on a comprehensive review on our assets based on current business conditions and future operational needs,” says the company towards the end of its report before sharing several strategies it says it will pursue to improve future financial results.

For the most part, the strategies HTC lays out are the same most companies in its position say they will pursue. That is, the company says it will find ways to cut costs and improve its competitiveness. However, its last point is interesting. HTC says it will “aggressively develop new business opportunities beyond smartphones.”

Following the release of the report, the price of the company’s shares hit a 12 year low on the Taiwanese stock market, forcing CEO Cher Wang to apologize to shareholders.

[source]HTC[/source][via]Android Authority[/via]

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