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HTC stuck with inventory, weak Q2 revenue

HTC joins Nokia and RIM in the struggling smartphone maker club.
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Written by Larry Dignan, Contributing Editor on

Add HTC to the list of struggling smartphone makers.

While most eyes are the Research in Motion and Nokia situations, HTC continues to put up worrisome financials.

The company said that it will deliver second quarter revenue of NT$91 billion with 27 percent gross margins. Analysts were looking for revenue of NT$103.6 billion and the second quarter outlook negates HTC's previous optimism.

HTC added that its revenue outlook includes a charge of NT$2.6 billion to "facilitate the clearance of channel inventory for certain products shipped from last year." Without that charge, HTC revenue would have been NT$93.6 billion. In any case, HTC missed its sales targets dramatically.

One reason HTC fell short was a U.S. Customs battle with Apple. HTC imports were held at the border and sales fell. Ultimately, HTC imports resumed. It's unclear whether the HTC customs issue will be permanent damage.

Meanwhile, HTC confirmed that the U.S. International Trade Commission has begun an investigation. The company said:

With respect to the Finland based handset maker, Nokia filing US International Trade Commission (US ITC) investigation against HTC Corporation, HTC confirmed that US ITC has instituted the investigation of this case on June 04. HTC does not comment on cases that have already entered legal proceedings.

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