HTC Q3: Razor thin profits but its recovery still on track

The Taiwanese phone maker drummed up a tiny profit for the three-month period, with the hope that it can do better during the lucrative December holiday quarter.

Image: CNET/CBS Interactive

HTC's recovery is still on track, but the carriages still seem a bit wobbly.

The Taiwanese phone maker on Friday announced fiscal third-quarter earnings [PDF] of $19.7 million on revenue of $1.37 billion, or 2 cents a share.

Compare that to last quarter when HTC generated $75 million in profit, things look a little tepid. But look back a year ago, its year-ago quarter left a $101 million loss  in the company's coffers.

On the whole, things are looking pretty good.

The company's latest fiscal third-quarter saw a razor thin profit to come out of what is typically a dry three-month period, made worse by a bevy of Apple and Android announcements, not least the iPhone 6 and iPhone 6 Plus, and the new Nexus 6 smartphones.

Bottom line? Not so bad, and could've been a lot worse.

HTC said its flagship HTC One (M8) was the money-maker during the quarter, which the company said had "sustained momentum in most markets," but did not name which. Its Desire line of smartphones also "holding their own or expanding."

Chief executive Peter Chou said in prepared remarks:

"This challenging quarter saw HTC step up to the plate, maintaining profitability in the face of an intensely competitive environment. By providing balanced product offerings across all major regions and increasing the buzz around the brand, our partners have been able to extend their reach into established and emerging markets, especially with the Desire range."

Looking ahead to the fiscal fourth-quarter, HTC said it expects revenue to land somewhere between $1.41 billion and $1.54 billion, with earnings per share to be about 1 cent.

The company's gross margin is also expected to drop by a couple of percentage points.

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