HTC remains in red in Q3 but gross margin improves

Taipei, Nov. 13 (CNA) Taiwan-based smartphone brand HTC Corp. remained in the red in the third quarter but its profit margin improved for the third consecutive quarter.

HTC posted a net loss of NT$2.62 billion (US$84.79 million) and loss per share of NT$3.18 in the quarter, both worse than the NT$2.09 billion in net loss and NT$2.53 in loss per share seen a quarter earlier, the company said in a statement Monday.

Despite the continued losses, HTC said its gross margin, -- which reflects the difference between revenue and cost of goods sold -- rose to 4.7 percent in the July-September period from 2.7 percent a quarter earlier because of better controls on costs and stable sales of its virtual reality products.

HTC has been battered by fierce competition in the smartphone sector and has tried to diversify into the virtual reality space to compensate.

It unveiled its first VR headset -- the Vive -- in 2015 and put the headset on sale globally in April 2016 and has since launched several other VR headset models such as the standalone Vive Focus and the Vive Pro to try to boost sales.

The company said it has also intensified efforts to develop VR content, including offering software through its Viveport virtual reality app store that is compatible with VR headsets sold by rival Oculus VR.

But HTC does not release separate figures on its VR business, so it is hard to tell how much it is contributing to the company's overall revenue and margins.

In the third quarter, HTC had an operating loss of NT$2.79 billion, compared with operating losses of NT$4.9 billion and NT$3.4 billion in the first and second quarters, respectively.

While HTC continued to suffer a net loss in the third quarter, it posted NT$20.01 in earnings per share for the first nine months of the year because of the big one-time profit it booked in the first quarter on a US$1 billion sale of its smartphone ODM assets to Google.

HTC said it has launched the new smartphone models such as the U12 Life and the Exodus 1, the company's first blockchain phone in recent months, which is expected to help the company boost revenue from its smartphone operations.

Boosted by an improving gross margin, HTC shares bucked the overall market Tuesday morning, rising 3.90 percent to NT$44.00 as of 1:15 p.m. while the Taiex was down 0.77 percent at 9,755.19 points.

Source: Focus Taiwan News Channel