HTC Posts Q4 2016 Financial Results with $116.7 Million Operating Loss

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HTC has disclosed its financial results for the last quarter of 2016, and its dry run continues for yet another quarter. Revenue stagnated for this quarter compared to the last, and when compared to the last year, revenue streams declined significantly for the Taiwanese company.

Quarterly revenue of the company came in at NT$22.2 Billion, or $729 Million. This figure is comparable to the revenue earned in Q4 2016, but is a year-on-year decline when compared to the NT$25.7 Billion ($833 Million) from Q4 2015. The Gross Profit of NT$2.3 Billion ($74.5 Million) in Q4 2016 is also a marked decline from the NT$3.6 Billion ($116.7 Million) posted in Q3 2016 as well as in Q4 2015. The fall in Gross Profit indicates an increase in the cost of manufacturing of its goods, while declining revenue indicates falling sales [Gross Profit = Revenue – Cost of Goods Sold].

The press release accompanying the financial statement mentions “robust sales performance” and “quarterly revenue improving sequentially over 2016”. While revenue has improved when compared to the other quarters of 2016, Q4 is usually the highest point for HTC after which the revenue takes a big dip. In light of this, having revenue stagnate and not reach the previous year’s level is worrying and gives little hope of how Q1 2017 will fare in terms of Revenue and Gross Profits.

Moving on to Operating Profits, HTC saw an Operating Loss of NT$3.6 Billion ($116.7 Million) in Q4 2016. The same figure in the previous quarter is pegged at a loss of NT$2 Billion ($64.8 Million) and a loss of NT$4.1 Billion ($132.9 Million) from the previous year. On the bright side, HTC did manage to shave off some losses from last year as it has tried to aggressively manage its operating expenditure, bringing in as much as a 34% cost reduction over the year.

Nevertheless, HTC CEO and Chairwoman Cher Wang is pleased with the overall performance over the past year. She rightfully credits HTC VIVE for being a pioneering product in the currently limited VR space, but chooses to skip over addressing the specific performance of the mobile segment in her statements. Now we will have to wait and watch how the HTC U Ultra helps HTC Q1 2017 financial results.