HTC's Q2 profit plunges 60% amid turnaround struggles

HTC's planned turnaround is going to take a lot longer than expected.

The struggling smartphone company posted a second-quarter profit of NT$7.4 billion, or US$247 million, nearly a 60 percent decline from its year-earlier profit of NT$17.5 billion, or US$584.3 million.

Revenue for the Taiwanese company fell by more than a quarter to NT$91.04 billion, or US$3.04 billion.

The results underscore a growing trend in the smartphone business: that virtually everyone but Apple and Samsung is struggling to grow amid intense competition. HTC's One series of phones got a warm critical reception, but also got lost in the shuffle between the launch of Samsung's Galaxy S3 and the anticipated launch of Apple's next iPhone.

HTC had previously warned that its results for the second quarter would be weak. Its third-quarter results aren't expected to be much better, with the company expecting to generate between NT$70 billion ($2.34 billion) and NT$80 billion ($584.3 million) in revenue, a sequential decline from the second quarter.

The gross margin is expected to slip to 25 percent from 27 percent in the second quarter.

HTC had some hiccups in the second quarter, including a temporary ban that kept some of its key products -- the One X for AT&T and Evo 4G LTE for Sprint Nextel -- from hitting the U.S. market.

Perhaps an indication of HTC's troubles, the company didn't disclose in its financial press release the number of smartphones it shipped in the period. Last year, it said it shipped 12 million.

Oppenheimr & Co. analyst Ittai Kidron said he estimated the company shipped roughly 9.8 million phones in the period, up slightly from the first quarter.

With Apple's iPhone 5 expected to launch in the second half, it's unclear whether HTC will be able to generate enough buzz for its own products for the rest of the year.