Thu, Nov 04, 2004 - Page 10 News List

Acer says profits to double

By Amber Chung  /  STAFF REPORTER

Acer Inc, the world's fifth largest personal computer (PC) vendor, yesterday projected that its net profit for the fourth quarter will double from the previous quarter, boosted by growing revenue and potential gains from share sales.

Net income is projected to increase to NT$3.2 billion (US$95.5 million) in the fourth quarter from NT$1.4 billion in the third quarter, said Philip Peng (彭錦彬), Acer's chief financial officer.

The company forecasts NT$1.3 billion in operating income in the fourth quarter and between NT$1.6 billion and NT$1.8 billion in non-operating income through the planned sales of shares in BenQ Corp (明基電通) and Hon Hai Precision Industry Co (鴻海精密).

The company expected global demand for notebooks to increase by 25 percent to 30 percent, and demand for desktops to climb 10 percent to 15 percent in the October-December quarter -- and Acer will likely see better growth than the average, company president Gianfranco Lanci said yesterday.

"We are in good position and should become the world's fourth largest notebook and desktop vendor next year," Lanci said in his first investor conference after his appointment, which was announced in September.

Acer is targeting 30 percent revenue growth in the fourth quarter of this year in light of surging orders.

The company said it expected its global revenue for next year to jump by up to 40 percent compared with this year's estimated revenue of NT$210 billion, which was adjusted upward from the original forecast of NT$202 billion.

Notebook and desktop shipments for next year are expected to grow by 2 million units each and liquid-crystal display (LCD) monitor shipments could increase by 3 million over the same time, according to the company. Acer hopes to ship 3.5 million laptops, 2.5 million desktops and about 4 million LCD monitors this year.

With regard to the China market, one of the company's target markets along with the US, "we flunked the market test this year," said Acer's chief executive officer Wang Jeng-tang (王振堂).

The "greater China" region consisting of China, Hong Kong and Taiwan made up 11 percent of Acer's total NT$122.58 billion sales in the first three quarters of this year. But sales in the region grew just 11 percent compared with a year ago. Wang attributed the less-than-ideal performance to the impact of China's measures to cool down its economy, and the delayed effect of the company's distribution channel restructuring and account receivables insurance mechanism.

"We believe that we will see sales double in China next year after the effects of our efforts appear," Wang said.

Meanwhile, the company's close cooperation strategy with second-tier distribution channels and increased power over the pricing of its products in the US market has paid off, he added.

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