[One (M7) General] BarryH_GEG:
Public companies like HTC serve their shareholders who buy stock in a company because they feel that stock is going to appreciate over time increasing the size of their investment (profit). Companies reward investors by growing sales, profit margins, and generating cash that's used for reinvestment to further their growth and increasing the market capitalization of the company. Doing so makes their stock appreciate which rewards the investors that placed their faith in them. This is HTC’s 2-year stock performance as of today.

In February, HTC revised their Q1 2013 guidance down to a level so low that it spooked analysts to the point there was a run on HTC's stock that triggered stop-sales on the TW exchange it's listed on (twice) because the amount of volume being sold and the stock's price decline triggered electronic safeguards. The revenue guidance HTC provided for Q1 that caused the stock fall was between NT$50 billion and NT$60 billion. Those are numbers provided by HTC less than eight weeks ago. The number they actually posted today was NT$42.8 billion. So not only did they miss the low-end of their own guidance they've demonstrated an inability to forecast their business. The latter's actually more troubling to analysts than the miss in revenue. And keep in mind that revenue is accounted for when devices are shipped to resellers; not when they are purchased by end consumers. So HTC's shipping rate is what caused the miss, not the sales or popularity of the One. And that they didn't know within an eight week span how deep their component issues were causing them to issue erroneous guidance is indeed troubling.

Operating margin (profit) was 1/10 of 1% of revenue for the first three months of 2013. You don't have to be a finance expert to know that's not sustainable. And the One's delay has put it right up against the launch of the SGS4 which will be accompanied by wider distribution and Samsung's gazillion dollar marketing budget. Apple's also launching the iP5S and possibly a lower-priced device in June according to analyst's speculation. Neither of those things is going to be good for HTC's full-year revenue. The analysts expect HTC to benefit from the One's sales in Q2 but that they'll decline again in the remaining quarters of the year. 30 out of 33 analysts have a "sell" rating on HTC's stock.

Their financial position was 25% better than today last August when the Taiwanese government began talks of bailing HTC out rather than letting them fail. HTC cannot continue to exist the way it does today and a single positive quarter based on the success of single device can't reverse their fortunes enough to change that. So it's highly unlikely they'll go out of business but some type of government intervention accompanied by a restructuring or merger or JV with another company are pretty much a given.

With stiff competition from Apple and Samsung, HTC has posted some less than stellar numbers the past few quarters. The company is still profitable, but its decline in sales and revenue have contributed significantly to Taiwan’s five months of decline in exports which saw a drop in July of 11.6% from a year earlier. HTC may be about to receive help from the Taiwanese government as it looks to turn its fortunes around after slipping away in the smartphone market recently. According to the Commercial Times, Taiwan's Central Bank Governor, Perng Fai-nan raised the issue during a meeting with government officials, suggesting it stepped in and offered assistance to the manufacturer. Perng noted that HTC's declining sales had had a knock-on effect with Taiwan's exports, which have also witnessed a decline in recent months. During the meeting, Perng apparently went on to say that the financial status of HTC is "of vital importance to the islands' gross domestic product". The Taiwanese government is taking this issue seriously, with an unnamed official reportedly saying the Ministry of Economic Affairs is already considering various ways to help out HTC.

http://www.techradar.com/us/news/ph...htc-could-receive-government-bail-out-1091781​

These numbers show the production shortage really is that bad, and my sense is that it won’t get much better in the second quarter because many of those issues continue,” said Dennis Chan, an analyst at Yuanta Securities Co. in Taipei, who recommends selling the stock. “For smartphones, timing is everything and the delay means they lose that timing.”

http://www.bloomberg.com/news/2013-...w-profit-after-latest-smartphone-delayed.html​

Profit is likely to recover in the second quarter as HTC One sales increase, said Daiwa Securities analyst Birdy Lu. The company has been touting the camera's performance in low light, and plans to more than double advertising spending under a new marketing chief. "HTC's whole schedule was thrown into disarray because of the HTC One, which meant it didn't have the revenue coming in but still had a lot of fixed costs," Mr. Lu said. "There will be some improvement this quarter in terms of the bottom line, but they still face a lot of competition."

http://online.wsj.com/article/SB100...38196.html?mod=WSJ_hp_LEFTWhatsNewsCollection​