Digest: Samsung, HTC fall short of forecasts

July 5, 2013
earnings
Samsung, HTC fall short of expectations

Smartphone makers Samsung and HTC reported preliminary second-quarter earnings with lower-than-expected sales and revenue Friday, raising concerns that the smartphone firms aren’t able to sustain the kind of growth that has helped them prosper.

Samsung offered its strongest-ever guidance, with expected sales of about $50 billion and a projected operating revenue of $8.1 billion to $8.3 billion. But that fell below analysts’ expectations of around $8.8 billion in revenue, according to Reuters.

HTC reported a net income of nearly $42 million, below expectations of around $66 million — and down 83 percent from the same period last year — despite glowing reviews of its HTC One smartphone.

The two companies are in very different positions in the smartphone world, with Samsung on top of the market and HTC struggling to stay in the game. But both face an issue that plagues the wider market — sales are slowing, and companies can’t keep up with sky-high expectations based on their growth of recent years.

Thursday’s results were particularly gloomy for HTC. The first to make phones running Google’s Android operating system, HTC has been slipping fast in the smartphone market. According to IDC, HTC was the fourth-largest smartphone manufacturer in 2012 but fell behind ZTE and Huawei during the final three months of the year.

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— Hayley Tsukayama

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