HTC profit and shipments up in Q2, but gross profit margin down

HTC profit and shipments up in Q2, but gross profit margin down

HTC has reported a 36% increase in profits year on year and 65% sequentially for the last three months ending on 30 June 2010.

The Taiwanese manufacturer saw its net operating profit increase from 6.88 billion Taiwanese dollars (£137m) to 9.35 billion Taiwanese dollars (£187m) over the past year.

Over the last quarter, the manufacturer has seen performance improve across nearly all of its key performance indicators.

Revenue increased by 60% year on year. One of the biggest spikes for HTC has been in shipments. During the same period last year, the manufacturer shipped three million units, and in Q1 this year it had only increased shipments by 300,000 to 3.3 million. However, over the last quarter shipments grew to 5.4 million units, an increase of 2.1 million, over three months

Even though volume shipments increased, gross profit margin fell from 30.6% last quarter to 29.7% this quarter.

Over the next quarter, HTC is predicting that volume shipments will grow again and reach 6.5 million.

In a presentation to investors made by HTC CFO, Hui-Ming Chen, it said: ‘Robust demand, coming across the board globally, drove our record high unit momentum and substantially exceeded our original guidance. We see very strong sequential unit growth from both US and Europe for the quarter.

‘Each of our hero product portfolio is capable to deliver multi-million unit on its own market segment; which provides a strong and sustainable growth engine for our scale strategy today compared to our historic niche scale level where we had only limited hero products at most per year and unit run rate per product is capped at sub million scale on average.’ 

Meanwhile, the manufacturer has recruited two former Sony Ericsson directors to its top management team.

Sony Ericsson’s former chief technology officer, Ron Louks joins HTC in a newly created role as chief strategy officer. Kouji Kodera also joins from Sony Ericsson where he was head of products, in another new role as chief product officer.

Florian Seiche, who has been driving HTC in the EMEA regions, has been promoted from vice-president of HTC EMEA to president.

HTC CEO Peter Chou said: ‘As the smartphone industry expands at this lightning pace, it is essential for HTC to grow its management capabilities from within while also adding outside expertise.’

Written by Mobile Today
Mobile Today

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