Personal computer company Acer Inc, whose stock has risen 76 percent this year, said profit will fall less than earlier forecast in 2003 as European laptop PC sales beat targets.
Group net income will drop 16 percent to NT$7.3 billion (US$213.7 million), from NT$8.7 billion last year, compared with its March forecast of a 31 percent drop. Sales will rise 43 percent, higher than an earlier prediction of 23 percent growth, the company said in a release.
Acer has contracted all of its manufacturing to partners including Hon Hai Precision Industry Co (
"Acer has been following a brand strategy after abandoning manufacturing," said Barro Liao (
Shares of Acer rose NT$0.50, or 1 percent, to NT$50.50. The stock has gained more than double the 33 percent rise in TAIEX this year.
Acer is benefiting as a strong euro and new laptop models with wireless features spur demand in Europe. The region was the fastest-growing PC market in the third quarter, helped by a more than 50 percent rise in notebook shipments, researcher IDC said.
Acer, one of the first PC makers to introduce laptops that use Intel Corp's wireless-enabled Centrino chips, said last week it may become the largest seller of notebooks in Europe during the fourth quarter, displacing Hewlett-Packard Co.
The company has gained market share by offering better prices to distributors, said Tony Tseng, an analyst with Merrill Lynch & Co in Taipei.
"Acer's channel partners can make more profit than they can with Hewlett-Packard, which has been squeezing margins," said Tseng, who has a "buy" rating on Acer shares.
Support from Acer's manufacturing partners in Taiwan has also enabled the company to offer more laptop models than rivals International Business Machines Corp and Toshiba Corp, he said.
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