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HTC swings to slim profit, but sales still down in 'challenging quarter'

The HTC One M8 and Desire smartphones have helped HTC avoid a second cruel summer of losses.

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What a difference a year makes: HTC was able to turn a profit in the third quarter thanks to the HTC One M8 and Desire smartphones.

The Taiwanese company posted a third-quarter net profit after tax of NT$600 million ($19 million). That's roughly a quarter of the profit made in the previous three months, but a big improvement over this time last year when HTC reported its first loss in a decade.

HTC isn't out of the woods yet. Its quarterly revenue of NT$41.9 billion ($1.38 billion) declined 11 percent from a year ago, and more than 35 percent from the second quarter, when the One M8 launched.

As one of the few pure mobile device manufacturers left in the industry, HTC has struggled to keep pace with larger rivals such as Apple and Samsung. Its results underscore the company's dilemma: It lacks the scale and resources to effectively compete against the players in the premium category, while upstarts such as Xiaomi and Chinese tech conglomerates such as Huawei are pressuring it from the bottom.

HTC earlier this year set out to expand its portfolio beyond its single flagship HTC One smartphone, bringing back the Desire family of smartphones in an effort to appeal to more budget-conscious consumers. The company hasn't given exact figures for which phones are selling well.

In a period described as a "challenging quarter", HTC said the HTC One M8 and Desire line of smartphones as "holding their own or expanding their markets despite stiff competition." HTC also identified the Desire 610 and 510 as strong performers in the US and Europe, while the Desire 816 was "solid" in Taiwan, China, India and the Middle East.

HTC appears to damn the 64-bit octa-core smartphone Desire 820 with faint praise, mentioning weak sales from its China launch but "support from the major operators." In China, HTC faces stiff competition from manufacturers such as Xiaomi, which became the No. 3 smartphone vendor in the world in the third quarter, according to IDC and Strategy Analytics.

HTC, which was a dominant smartphone player just a few years ago, having launched the first Android device in 2008, doesn't rank in the top five.

In a bid to cater to more mass-market consumers, the company earlier this month unveiled the HTC Desire Eye, a smartphone that features both front and rear-facing 13-megapixel cameras designed for "selfies." It also introduced the Re, a portable camera that represents its first foray outside of smartphones and tablets.

HTC is also the manufacturer behind the new Google Nexus 9 , the new tablet that will be one of the first devices to get Android 5.0 Lollipop.

HTC expects revenue in the range of NT$43 billion to NT$47 billion, which topped market expectations, according to Reuters.