HTC forecasts wider than expected Q1 loss

The Taiwanese smartphone maker expects the worst to bottom out this quarter and return to profit in 2014, boosted by a better show from its flagship products.
Written by Ryan Huang, Contributor

HTC has forecast a wider than expected loss for the first quarter, but believes things will pick up enough for the rest of the year to return to the black.

The Taiwanese smartphone maker announced its sales outlook for Q1 would be between NT$34 billion ($1.12 billion) and NT$36 billion (US$1.18), in a press release on Monday. That's below the NT$39.3 billion (US$1.29 billion) average, according to a Bloomberg analyst poll and could be the lowest quarterly sales since 2009, according to the news wire.

However, HTC also projected gross margin to be 21.75 percent, above analyst estimates of 19.5 percent, and also an improvement over the 17.8 percent in Q4.

The struggling smartphone maker has been bracing for a continued dip in revenue in recent quarters, and has been on a mission to push costs down and spend more effectively.

In an earnings call on Monday, Chief Financial Officer Chialin Chang predicted revenue would grow after a weak first quarter, partly due to a better showing from flagship products. HTC has been eyeing to regain market share in the mid and low-end market to revive its fortunes.

"We took our eyes somewhat off the ball" in terms of product portfolio, Chang told Bloomberg in an interview last week.

The burden on HTC could be considerably lightened after it signed an agreement with Nokia last week to dismiss all patent lawsuits between them. The deal would see HTC will make payments to Nokia, and involve HTC's LTE patent portfolio.

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