HTC Reduces Losses But Still Posts Weak Q4 2016 Financials

Taiwanese tech giant HTC posted financial results for the fourth quarter of 2016 and the entire fiscal year on Tuesday. The results disappointed investors as the Taoyuan-based company recorded a seventh consecutive quarterly loss and industry analysts concluded that the firm's virtual reality (VR) division isn't helping it recoup losses incurred by its already struggling phone business. HTC recorded a revenue of $720 million from October to December of last year, which is a 13.6-percent decrease in comparison to the same period last year. The company's net loss during the final quarter of 2016 amounted to approximately $100 million, which is a small improvement over the $110 million loss posted for Q4 2015. HTC's recorded around $2.53 billion in total revenue during 2016, a 35.8-percent decrease compared to the previous year. On the bright side, the Taiwanese company managed to reduce its annual losses by 32 percent as it "only" lost $340 million over the course of 2016.

While generally disappointing, the company's financials seemingly suggest that some of HTC's attempts to reduce its operating losses are finally starting to pay off. However, industry analysts are quick to point out that the Taoyuan-based tech giant mostly managed to reduce its losses due to non-operating gains. Furthermore, while the company's VR business helped boost its revenue, it didn't do enough to recoup all of the losses incurred by its smartphone division. Given the current state of affairs, analysts believe HTC will continue to struggle in the coming months. However, the company's early foray into the VR segment may end up being the winning play as current estimates suggest the VR market will grow by a significant degree in the following years. VR hardware sales are currently projected to reach 20 million units in 2018, which is an almost 1000-percent increase in comparison to 2.2 million recorded over the course of 2016, CCS Insight claims.

Overall, while HTC's executives are understandably giving optimistic statements about the future, the company is likely in for a few more rough financial quarters. It's hard to predict whether the firm's VR gamble will pay off in the coming years, but HTC is bound to be in a lot of trouble if it doesn't.

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Dominik Bosnjak

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Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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