Despite weak performance, the balance sheet looks pretty good

HTC shareholders absorbed some pain today as the stock dropped almost 4% on the Taiwan Stock Exchange. The drop followed the company’s release of its Q4 results for 2013 along with a discussion of expected Q1 and 2014 results.

The main reason for the stock’s decline today is probably the Q1 outlook. Revenue guidance is between NT$34 billion and NT$36 billion whereas analysts expected, on average, NT$39.3 billion according to a survey by Bloomberg. The company is also expected to post a wider loss than analysts had been anticipating.

I don’t think there’s any argument that HTC makes very nice phones - HTC One. But gross margins are really low. For Q1 they’re forecasting just over 21% gross margin, and it’s tough to make a profit on that after subtracting their R&D, selling, general and administrative costs.

That said, Q1 gross margins are expected to rebound from the very weak Q4 levels.  This past quarter HTC generated a gross margin of only 17.8%. New phones and new market launches are perhaps helping them boost performance in the current quarter.

Despite the weak performance out of HTC over the past year, the balance sheet still looks pretty good. Their cash balance is even slightly higher than it was last year at NT$53.3 billion, equivalent to US $1.75 billion. This is a pretty good sign that HTC isn’t going anywhere.  They’ve got plenty of ammunition to keep fighting in the market.

It’s a strange market though. Samsung is by far the biggest and most financially successful Android vendor of all, and nobody from LG to HTC seems to be able to offer them a run for their money when it comes to volume and profitability. I doubt Lenovo buying the Motorola business is going to change anything.

I’ve said this before, and I’ll say it again.  While the other Android players don’t seem to be able to so much as put a dent in Samsung’s performance, they are good to have around in the market. They offer choice, and they keep Samsung on its toes in terms of hardware and software innovation.


Reader comments

Analyzing HTC's latest financial result



Posted via my thumbs and Google Keyboard. (Defective) N7 2013

I applaud Samsung they have earned there overall standing on the android platform since May 2011.

Samsung has owned global market share of the android platform as well as market share of the entire android platform since May 2011 as well.

Samsung has been the clear leader of software enhancements and feature implementations on the android platform they are who everyone copies from.

Htc had the android platform in 2009 and 2010 after June 2011 they have hit ROCK BOTTOM.

There elimination of the entire Htc Evo line as well as usage of sdcards and removable battery HAS SIGNED their ticket to a grave site where android manufacturer go to die.

People better take a good look at the Galaxy Note products they are the GOLD standard of technology today.

These are the direction products will be going in as the future takes place.

People want handsets that offer true feature enhancements and software implementations the ability of true multitasking and productivity options.

I applaud LG for it's fake it to make approach copying Samsung at every turn they understand what people want and what direction handsets are going in down the line.

Plain and simple NOBODY can help HTC no website, no fanboys, no articles, android customers determine manufacturers fate.

Android customers have spoken VERY LOUD AND CLEAR definitely.

Posted from my Galaxy Note 3 on Tmobile via Android Central App

You, sir, are an idiot. Samsung the "gold standard", stop smoking crack or go to a doctor to inspect your weird head.

It's a shame that a company like Samsung manages to rule the android market, with worse build quality and the ultimatively worst android skin of all manufacturers.

Removing all of that stuff didn't kill them it's the removing of their great marketing that destroyed them also pushing out too many of the same phones at the same time so shut the hell up about them and I know 1 thing for sure and that's that Samsung isn't a Gold Standard because it's not gold. Gold is a valuable rarity and Samsung is more like the plastic standard because you can find it anywhere because it's cheap. HTC is the gold rarity for your information. And how do you like still running on 4.3?

Posted via HTC One on their cool app

There elimination of the entire Htc Evo line as well as usage of sdcards and removable battery HAS SIGNED their ticket to a grave site where android manufacturer go to die.

OK, I'm convinced that Samsung Fanatics are delusional and treat fallacies as gospel. Using the above logic, HTC needs to add SD Cards and removable batteries to all products in their lineup in order to reverse their financial losses. Also, the fact that devices like the iPhone have achieved great sales, is due to the fact that it has an SD Card slot and removable batteries. I can't believe that it's 2014 and talks of SD Cards and removable batteries continues to persist...oh I forgot, this is an HTC article. silly meez

1. "Samsung has owned global market share of the android platform as well as market share of the entire android platform since May 2011 as well." Ummm... you basically said the same thing twice somewhere in there. Good job on that literacy.
2. "There elimination of the entire Htc Evo line ... HAS SIGNED their ticket to a grave site where android manufacturer go to die." Yes, because eliminating 1 phone, available on 1 carrier, amongst hundreds of different phones on dozens of different carriers, led to their ultimate doom. What a retard.
3. "as well as usage of sdcards and removable battery" Yes, because the only thing normal consumers (people who don't come to these websites) care about, is SD cards and removable batteries. You seriously have no clue. The group that cares about this sort of stuff is small, but very vocal. Yet another made up "fact" by the almighty Dick Yarrell.
4. "People better take a good look at the Galaxy Note products they are the GOLD standard of technology today." Yep, Gold Standard of bloat, relatively slow updates, and a ton of gimmicky features a lot of people don't use, let alone know are even there.
5. "People want handsets that offer true feature enhancements and software implementations the ability of true multitasking and productivity options" According to you. But then again, according to you, all everyone cares about is having the best speced smartphone out there, to the point of being a total spec whore, despite the fact that specs are not all that matters. Motorola has proved as much with their Moto X and Moto G. What a joke.

Moto x put the galaxy like to shame. They use real features, the best plastic and best design. This is just the start of the moto x and moto g like up. I can't wait to see what the moto x 2 will be like :-) moto g is a gift from Motorola and Google. It almost matches the specs on the cheat and overrated Samsung Galaxy S4.

Posted via Android Central App

Samsung copied every move that apple has made lol. Samsung can beat apple in sales in the United States.

Posted via Android Central App

I hope HTC seriously make a comeback and become the king of android like it still was 2 to 3 years ago. I can't stand Samsung.

Posted via Android Central App

I would be 100% behind if I didnt own samsung products for the past two years with the note 2 &3. Although my favorite is HTC being that I had the Evo 4G Evo 3D Evo Shift touch pro touch pro 2 hero touch pro touch...just going down memory lane I cant wait for high tech computer to regajn the throne they do innovate and I miss the innovations

Posted via Android Central App

Options are great especially since Samsung does nothing for me.

Posted from my Nexus 7 2013 via Android Central App

today's market is all about expectations... no one cares HTC is a profitable company apparently people just expect and when their expectations fall short in their despair they put the company in an even worse scenario than it ought to be. these "analysts" should be prevented from setting expectations and gamble with other people's money most of the time they get it wrong anyway and the company suffers needlessly. they really should get a proper job.

I bet the majority of users on this site don't even like Samsung products. But they do seem unstoppable.

Posted via Android Central App

I don't anything against their products, they are just bland. The only time I give Samsung a second look is if I can get a really good deal on one of their products.

Penny wise, pound foolish.

If one were to compromise quality, features, and performance by going cheap, saving $200 amounts to approx. 27.4 cents per day or $1.92 per week over a 2 year period.

but why compromise? When you find the phone you like that has the features you need, run with it. Samsung, LG, HTC doesnt matter if it works for you.

For me, the Note 3 is what I need in a phone. HTC, Sony, LG all would be a compromise. Others it is the Boomsound HTC (either the One or the Max), Sony is the waterproofing. you get the idea.

Android Central's year end review (11-26-2013) by Alex Dobie listed "the best Android phones you can buy" in the following order:
the Moto X, HT​C One, LG G2, Sony Xperia Z1 and Nexus 5.

Best value: ​Tie — the Nexus 5 and Moto G

Best oversized phone: Samsung​ Galaxy Note 3

Then to bring up the hind end.

Honorable m​entions:
Samsung Galaxy S4
Verizon Motorola Droid Max​x

I do not get your point. For many many other websites and more importantly customers, the S4 is phone of the year.

For me it is the Note 3, by distance, because it does things no other phone does. For others it is the G2.

Best of the year is the one you like, not the one some website says. AC is a great place to begin the search if you are looking to replace your phone and to keep up on what is going on in the industry. It is not the only opinion or the end all.

Many many other Websites??? Really NoNsense? Just because you cite false claims with authority doesn't make your claims true. Of course personal opinions are personal. Yet the best of the year is NOT necessarily the one you, or Yarell like. Hence, it's obvious why you don't get my point.

And yes, there are differences of opinion.

I invite anyone who cares about authoritative differences of opinion about this issue to simply Google: "2013 Smartphone of the year"

Following are 10 examples of many, many other Websites with different opinions.

Android Authority: Smartphone of the year HTC One, S4 runner up
ZD Net: 1st-HTC One, 5th-Note 3, 7th-S4
Venture Beat: MVP - HTC One
Christian Post: 1st-HTC One, 2nd-Note 3, 3rd -S4
Gizmodo: Reader's choice:1st-Nexus 5, 2nd-HTC One, 3rd-iPhone 5s
Gizmodo Editor's choice: HTC One, Honorable mention: iPhone 5s
EISA named the HTC One the “European Advanced Smartphone” for the year.
Business Insider "most innovative": 1st-HTC One, 2nd-Nexus 5, 5th-Note 3, 6th-S4
Android and me "2013 Reader's Choice Award": 1st-HTC One, 2nd-Nexus 5, 3rd Note 3, 5th-S4
T3 Gadget Awards "smartphone" winner HTC One

and on and on and on.

Again Google search "2013 Smartphone of the year" if facts rather than NoNsense's agenda matter to you. And of course, it's natural to justifiably prefer one's purchase. But when we get bullcrap like "Scratch & Dent" it's an arrogant disrespectful agenda. At least with Yarell's above post, he wasn't intentionally deceiving in the manner he stated his opinions.

Opinions are not facts. Are you missing that JimBoB? I know readin' & writin' make it hard and all

There are tons of votes out there for the G2, iPhone, Nokia Lumina and others.

Again I say it. The One is a nice phone. I do not like the casing and the camera was a step backwards. It is not the "phone of the year" for me, and for a lot of others.

I do not know what your issue is...

I, and others I hope, prefer opinions from professionals who can't tout deceptive personal agendas and retain their position as authoritative editors.

I, and I hope others, think for myself and buy what I need instead of following so idiot with a keyboard and a Web page.

Kit Kat tastes like Jellybeans. Can't tell them apart...

None of this is true, Htc One holds that title for more then it's boom sound .... Please do some research, instead of making false claims.... There are numerous reliable sources that will say The Htc One is the phone of 2013

Moto x is the best device with their only unique features, smoothness and beauty.

Posted via Android Central App

Moto x and LG g2 were the best devices of 2013. The moto g is a beast for that price so is the nexus 5

Posted via Android Central App

Except they said nothing about quality, features or performance being a factor in this decision...Simply that one was bland.

I like HTC a lot. I do not fawn over the Scratch & Dent shell like others do, but like Sense and the radios overall. They need to find a consumer friendly way to set themselves apart from the rest of the pack. Right now they are just following the pack.

Boomsound is a perfect, but weak, example. It is a nice feature but pair it up with the ultrapixel camera and the just even out.

I am hopeful that the M8 is the complete package.

NoNsense - "Jokester that you are"
Your new fav derogatory, "Scratch & Dent shell", totally flushes any credibility you may think you have, down the toilet. It is extremely difficult to "Scratch & Dent" the HTC One. The industrial strength diamond cut metal is hard, not soft. So just keep repeating your "Scratch & Dent" bullcrap and more of your comments will be regarded as equally lame.

HTC Ones as well as all other smartphones are not currently designed to be dropped on or slid across a concrete parking lot and remain pristine.

it is scratch and dent, go into the forums and you will find at least one picture, and if you do a Google search you will find more.

It is not a casing that I care for. My opinion. I actually prefer a soft touch rubber back like what was on the ReZound. The upside to the plastic on the S4 is that it takes all of 1 minute and 5$ to change out the back if I scratch it.

You seem to think I am for one particular thing/brand. I am against individual phones because they sorely lack in areas. I am not against a brand.

Scratch & dent Shell. I do not like that casing. The phone is nice and I like HTC.

How about actually reading what I wrote instead of reading what you think I am saying.

You prefer a cheap plastic case with a removable $5 plastic back. OK That's great.

You personally don't like HTC's award winning museum quality industrial design. Fine. Just don't misrepresent it with your "Scratch & Dent" derogatory bullcrap otherwise you loose credibility.

If you wish to cite comparable editorials and forums about the design of each. Go for it. Make my day.

It does belong in a museum. Maybe if you do not touch it it won't be scratch & dent

Kit Kat tastes like Jellybeans. Can't tell them apart...

if the CEO had any shame he would have committed seppuku long ago.

do you hear me Chou???????????????????????

They should redesign/update the HTC One and continue to sell as a mid-range option while having the New HTC One+( or 2 or whatever its called) as the High-end device and introduce a completely new (maybe polycarbonate) low-end phone...

What hilarious is how slow the note 3 manages to be, much slower than the s600 HTC one with sense on pretty much every single task.

It stutters, really. My s3 mini was useless before CM. But exynos is even worse than Novathor. Samsung should stop the bloat and let Qualcomm do every single chip for them, not just a few.

The z1 compact, moto x, HTC one and of course all iPhones above the 5 (included) all mange to be insanely faster even on simple things. The oversatured screen (even pentile on the s4! They take their costumers for ignorant fools!) doesn't help.

Posted via Android Central App

Lol bullshit

Kit Kat tastes like Jellybeans. Can't tell them apart...

Basically HTC should focus on high end and make only 3 devices, they shouldn't dilute the brand that everyone that loses money does. One, one mini, one max. Focus on them and support them!

Posted via Android Central App