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HTC swings to profit in 2018 after disposing assets in Q1

2019/03/15 21:02:20

Taipei, March 15 (CNA) Taiwan-based smartphone brand HTC Corp. posted a net profit in 2018 after it disposed of its smartphone ODM assets to Google in the first quarter of that year to boost its bottom line, according the results released on Friday.

In a statement, HTC said it registered NT$12 billion (US$388 million) in net profit in 2018, compared with a net loss of NT$16.91 billion in 2017, stopping a three-year losing streak. Its earnings per share for 2018 stood at NT$14.72, compared with NT$20.58 in loss per share in the previous year.

The 2018 net profit was achieved even though HTC's consolidated sales fell to NT$23.74 billion, down 61.78 percent from the previous year, the seventh consecutive year of decline amid escalating competition in the global smartphone market's high-end and mid-range segments.

While HTC has entered the global virtual reality market by unveiling its first VR headset -- the HTC Vice -- in 2015 and its follow-up models subsequently, such as the HTC Focus, such efforts have failed to boost its sales and bottom line.

In the first quarter of last year, HTC booked the one-time profit it made on the US$1 billion sale of its smartphone ODM assets to Google, which boosted its EPS to NT$25.70 for the January-March period.

Without the income from asset disposal, HTC would have posted a loss per share of NT$3.16 in the third quarter of last year, worse than the NT$2.51 loss per share seen in the second quarter.

In the fourth quarter of 2018, HTC incurred NT$4.4 billion in net loss, with loss per share at NT$5.31, the results showed.

Despite a net loss in Q4, HTC's gross margin, which reflects the difference between revenue and cost of goods sold, grew to 8 percent from 4.7 percent in the third quarter, marking the fourth consecutive quarter of an increase.

As for 2019, HTC's sales for the first two months of this year fell 72.89 percent from the same period of last year to NT$1.63 billion.

To boost its smartphone sales, it launched the HTC Exodus 1, the company's first blockchain-focused smartphone, late last year. The HTC Exodus 1 went on sale in Taiwan and other markets in March.

Blockchain technology, originally devised for transactions of the digital currency Bitcoin, is seen as the backbone of a new type of internet in which information held on a blockchain exists as a shared database.

HTC said it has developed its own cryptocurrency wallet called Zion, helping the Exodus 1 function as a hardware cryptocurrency wallet.

Meanwhile, HTC is tapping the global 5G market by unveiling a first-of-its-kind 5G mobile smart hub in February. The product is essentially a 5G mobile hotspot for up to 20 users that will also serve as a mobile hub that can stream TV shows and movies from different apps, and it comes equipped with a battery so that it can be used anywhere.

(By Jiang Ming-yan and Frances Huang)
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