HTC Throws In The Towel, Will No Longer Issue Guidance After Business Deemed ‘Worthless’
No, I'm not saying that HTC employees are snorting lines of blow or drowning their sorrows in a whiskey river. But the company does show signs of imploding. Following a string of revenue losses over the past several months, HTC has decided to no longer issue guidance on its future performance.
HTC is hoping to avoid situations like the one that played out a couple of months ago when an analyst declared the company had "no value." Combined with HTC's outlook, investors got spooked and shares of HTC plummeted.
Here's the thing, keeping mum on future performance isn't going to change HTC's fortunes. The company just got finished reporting revenue of NT$21.4 billion, or around $660 million in U.S currency, for the third quarter. That's down from NT$33 billion (~$1.02 billion) in the previous quarter and NT$41.9 billion (~$1.3 billion) in the same quarter a year ago, and good for a loss of NT$4.9 billion (~$151 million).
On HTC investor call after huge 3Q loss, company declines to give 4Q guidance, says will not give guidance anymore— Eva Dou (@evadou) October 30, 2015
If you're a fan of HTC, this is tough to watch. It's also in stark contrast to days long gone. HTC helped pioneer Android with the first-ever Android handset, the HTC Dream (T-Mobile G1), a handset I still have tucked away in the basement as a keepsake. In the quarters that followed, HTC was killing it with record revenue and profits.
This seems to suggest that HTC is pinning its hopes on a $399 phone (soon to be $499) that, quite frankly, is under powered for the price, especially with competitors like the ASUS ZenFone 2 and OnePlus 2.
Pile on top of that HTC's decision not to release monthly security updates like its competition is doing -- it's just "not realistic," HTC says -- and it's hard to imagine HTC turning things around.
In any event, I'm pulling for HTC -- competition is good for the industry. I just don't think that withholding guidance from investors is going to have the effect HTC hopes it will.