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HTC predicts a challenging holiday season with shrinking revenues

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HTC (verge stock, 1020)
HTC (verge stock, 1020)

Following last month's unaudited disclosure that HTC had its first ever unprofitable quarter since going public, the company today confirmed it slumped to a $102 million loss for the third quarter of 2013. HTC co-founder and CEO Peter Chou says the company "delivered good progress" this quarter, adding that the launches of the mini and max versions of its HTC One flagship have filled gaps in its product line.

Chief Financial Officer Chia-Lin Chang also pointed out that the HTC One continues to outsell last year's equivalent smartphone, the HTC One X, and is expected to do so next quarter as well. The company also claims its expensive marketing campaign, which features actor Robert Downey Jr., has been a success, improving brand awareness in all markets it was run in.

Moving forward, HTC says it needs to improve both its marketshare and general profitability. The company isn't expecting a dramatic improvement in Q4, though: in the corresponding quarter last year, HTC took NT$1 billion ($34 million) profit from NT$60 billion ($2 billion) in revenue, with a gross margin of 23 percent. This year, the company expects to pull in between NT$40 billion and NT45 billion ($1.36 billion–$1.53 billion) in revenue, a huge reduction year over year.

Unlike last quarter, HTC declined to give a prediction for its profit or loss for the quarter, but it does note its gross margin will drop to around 20 percent and earnings per share are expected to be around $0.01–$0.06. That's a glum expectation; if the company, like last quarter, misses its revenue expectations by even a tiny amount, it's likely to post a second quarter of consecutive losses.