Why is HTC’s stock up 3.5% after its lackluster Q4 earning report?
This may sound a bit odd, but HTC’s stock price jumped 3.5% after the company announced that it lost NT$3.6 billion during Q4 of 2016. If that wasn’t bad enough, sales were down 13.6% when compared to Q4 of 2015.
So, that gives?
As is turns out, investors don’t always see the same things we do when we look at the numbers. We see that HTC lost money and that they sold fewer phones and are quick to write Q4 of 2016 off as a bad quarter. But with HTC’s stock price going up, there’s obviously something that we’ve missed.
On closer examination of the numbers, we can see that the NT$3.6 billion net loss that HTC reported for Q4 is actually less than the NT$4.1 billion HTC reported for Q4 of 2015. Losing money is never a good thing, but HTC is now losing LESS money than it was a year ago. On top of that, HTC lost less money in Q4 of 2016 despite the 13.6% year-over-year decrease in revenue. The numbers match up with HTC’s cost-cutting efforts which have allowed “enhanced resource realignment to deliver a 34% cost reduction over the year.”
If you take a step back and look at HTC’s quarterly numbers for the past two years, you can clearly see the company is operating far more efficiently than it was in 2015.
But will HTC swing back to profitability any time soon? That’s the billion dollar question that no one knows the answer to. The HTC U Ultra shows promise, but we don’t know how good he phone is until it starts shipping in early March. And then there’s HTC’s mysterious 2017 flagship smartphone which is expected to be powered by Qualcomm’s Snapdragon 835 SoC and may also be the company’s first button-less smartphone.
We know there are a lot of you who have already given up on HTC, but let’s not forget that the Android ecosystem is where it’s at now because of the groundwork that was laid by HTC. With only release 6-7 HTC smartphones planned 2017, we’re hoping one or two of them will be good enough that consumers will start buying HTC phones again.