Acer Inc (
The company is "certain it will make an operating loss in the second and third quarters," an official who declined to be identified said.
"The fourth quarter's profitability depends on recovery in PC demand." Demand for personal computers declined last quarter for the first time in 15 years as businesses and home users cut spending.
Dell Computer Corp, the largest PC maker, said sales and profit in the fiscal third quarter will miss forecasts.
Earlier this month, Acer said sales in the first seven months fell more than a third compared with a year earlier to NT$41 billion (US$1.2 billion), as demand for PCs slowed.
Still, Acer will report today a net income for the three months to June, as the company gained about NT$5 billion selling shares in Taiwan Semiconductor Manufacturing Co (TSMC,
Last month, Acer Chief Executive Officer Wang Cheng-tang (
Demand will probably not rebound by the fourth quarter, making it difficult for Acer to turn profitable from operations in the period, some investors said.
"We don't see signs of recovery in PC demand, so Acer is too optimistic in its target to turn profitable in the second half," said Cline Chiang, who manages Grand Cathay Securities Investment Trust Co's NT$1.5 billion High-Tech Fund.
Acer started reorganizing itself last December, separating its manufacturing and brand-name businesses to ease concerns it competed with its customers. Acer is betting the reorganization will help it to win more orders to manufacture on contract and streamline businesses to improve profit.
"Acer is still in the midst of corporate restructuring and we don't expect a significant turnaround until the fourth quarter or 2002," said Kirk Yang, an analyst with Credit Suisse First Boston Ltd in Hong Kong.
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