HTC finally returns to profit despite poor revenue from new smartphones

HTC is inching back to the upper echelons of the smartphone game in the shape of second quarter profits that came tagged with the warning that it is by no means out of the water yet.

The Taiwan-based smartphone manufacturer posted a net profit of NT$2.26 billion [£44 million] for Q2 2014 that was an increase of 80 per cent on the same period in 2013 and a vast improvement on the net loss of NT$1.88 billion [£36.7 million] in Q1 2014.

Net profit was a touch higher than the forecast of NT$2.09 billion [£40.7 million] made by 16 Thomson Reuters analysts and the firm’s operating profit for the same three-month period levelled out at an impressive NT$2.43 billion [£47.4 million].

Related: Apple iPhone 5S vs HTC One M8: Full spec breakdown

This all came with an asterisk in the shape of revenue that failed to reach the company’s modest expectations. The figure for Q2 2014 came in at NT$65.06 billion [£1.27 billion], which was at the shallow end of HTC’s own guided range of NT$65 billion [£1.26 billion] to NT$70 billion [£1.36 billion].

Revenue problems are nothing new for HTC as it struggles to keep pace in the worldwide smartphone market that it was once a permanent top 10 fixture in and it has since slipped out of the top 10 companies.

In order to address its problems the company revealed back in May that it has adjusted its supply chain, brought in lower priced models, outsourced certain production tasks and even sold a stake in a Chinese private-equity fund. None of this has contributed towards a sizeable increase in revenue and analysts are sceptical about the company’s future income.

"As features of Android phones are becoming more homogeneous to consumers, their life-cycle is now at best two to three months. I don't see a clear catalyst for HTC in the second half this year," CIMB analyst Wanli Wang told the Wall Street Journal.

HTC’s One M8 smartphone achieved an impressive 4.5 out of five on ITProPortal.com’s review back in April and it will hope that this optimism translates to more revenue in the coming quarters.