Profit for Fourth Quarter Misses Estimates at HTC

Smartphone manufacturer HTC, based in Taiwan, reported a fourth quarter profit that was lower than expected on Sunday, despite its aggressive measures for cost cutting and a one off gain.

The company has reported a profit of $10 million, compared to a loss of $99.9 million for the previous quarter and a profit of $34 million for the same quarter back in 2012.

However, that figure is behind the $24.3 million estimated amount of profit by analysts. The smaller number highlights how problems pile up quickly at a business that only two years ago was the supplier of 1 out of every 10 smartphones that were sold worldwide.

The Taiwanese company is now valued at just $4 billion after losing the past two years close to 75% of its market value and  is dwarfed by its rivals Samsung Electronics and Apple.

New corporate management installed over the past quarter to battle the slide in sales, must persuade its customers that the brand is still the stylish phones that are loaded with features, while keeping its development costs to a minimum.

Despite the newest flagship phone, the HTC One, receiving great reviews, the global share for the company of the smartphone market fell again to just 2.2% during the third quarter last year, from its peak of over 10% during the 2011 third quarter.

The company’s newest campaign has featured Robert Downey Jr., the star of Iron Man, analysts are still skeptical of the ability of the company to differentiate its brand image in a playing field that is highly saturated.

The company is amidst a huge cost-cutting campaign, which includes purchasing chips from vendors that are less expensive and outsourcing much of its production.

HTC also sold a stake in Beats Electronics a headphone brand, which booked them a one off profit before taxes of $85 million that was recorded in the final quarter of 2013.

Insiders said that the biggest problem the company has is connecting with worldwide consumers and that has caused them to shutter factories, huge executive departures and a reshuffling at the top-level of executives.

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