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Asustek profits surge on an increasing demand
LOOKING GOOD:
The world's biggest maker of computer motherboards' shares were upgraded to `sell' from `hold' after a rise in sales and profit last year
BLOOMBERG
Sunday, May 01, 2005, Page 11
Asustek Computer Inc, the world's biggest maker of motherboards, said first-quarter profits rose 9.3 percent, helped by increasing demand.
Net income rose to NT$4.7 billion (US$150 million), or NT$1.85 a share, from NT$4.3 billion, or NT$1.69, a year earlier, the company said late yesterday in a statement to the Taiwan stock exchange. First-quarter sales, announced earlier, rose 11 percent to NT$20.5 billion.
Taipei-based Asustek is benefiting from rising overseas demand for computers. Shipments of personal computers to European markets rose 14.5 percent to more than 17 million units from a year earlier, while worldwide shipments rose 10 percent, market researcher Gartner Inc said on April 18.
Asustek also announced last year's profit rose 30 percent to NT$15.1 billion, from NT$11.6 billion a year earlier. It had a 33 percent increase in its fourth-quarter profit.
Fourth-quarter net income rose to NT$3.6 billion from NT$2.7 billion a year earlier. The latest fourth-quarter figure was derived by subtracting nine-month earnings from last year's results.
Sales rose 7.3 percent to NT$25 billion.
Asustek had a recommendation on its shares upgraded to "hold" from "sell" at Citigroup Inc, which cited rising demand.
"The worst is over, given the recently improved end-market demand and Intel Corp's solid results," Citigroup analyst Kirk Yang said in a research report on April 21.
Intel, the world's largest chipmaker, said on April 19 that first-quarter profits jumped 25 percent to US$0.34 a share, beating the US$0.31 expected in a Thomson Financial survey.
"Asustek is on the right track," Yang said in the report. "It will be another six to 12 months before significant results can help its bottom line."
Yang raised his forecast for the stock's price target in the next 12 months to NT$86 from NT$74. Shares of Asustek fell 0.8 percent to NT$83.8 on Friday in Taipei.
The stock has fallen 0.8 percent so far this year, compared with a 5.2 percent drop in the benchmark TAIEX index.
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