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BenQ expects Q3 revenue to stay flat amid falling prices

BenQ Corp (明基電通), the nation's No. 1 mobile-phone maker, told investors yesterday that revenue for the third quarter would remain flat compared to the second quarter because of the declining average selling prices (ASPs) of its display products, which account for nearly half of its revenue.

The market is expected to recover next month, boosting liquid crystal display (LCD) monitor shipments, while ASP would drop in the meantime, said BenQ's president Sheaffer Lee (李錫華).

With slow demands for LCD monitors in the second quarter, BenQ posted a net income of NT$2.97 billion (US$87.2 million), or NT$1.28 per share, in the quarter, 3 percent down from NT$3.07 billion, or NT$1.32 per share, in the first quarter.

Net sales slightly decreased to NT$42.06 billion from NT$42.22 billion over the same time, and gross margin dropped to 11.4 percent from 12.7 percent, according to the company.

BenQ chairman Lee Kun-yao (李焜耀) said retail prices of LCD televisions are expected to drop below US$50 per inch next year, driving a business boom for the market at the same time.

The company has recruited marketing professionals in European and Asian countries to boost their LCD TV business by taking the chance, Lee Kun-yao said.

BenQ expects to at least double its LCD TV shipments next year from this year's 400,000 units in line with worldwide demand, which is expected to grow from 8 million units this year to 16 million units, said Stevie Chou (周奇賢), vice president of research for SinoPac Securities Corp (建華證券).

However, BenQ said yesterday that it has also seen a growing handset inventory in China and many other countries in the current quarter.

On average, the company saw its products stay around 48 days in warehouses before being shipped in the second quarter, four days more than the previous quarter. LCD monitors, in particular, stayed up to 60 days, compared with two weeks in the first quarter.

BenQ should be able to meet its goal of shipping 16 million handsets this year, as it shipped 9.5 million handsets in the first half of the year, Chou said.

He also said the company might ship around 1.73 million LCD monitors this quarter, up from 1.6 million last quarter.
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