Fri, Apr 27, 2007 - Page 12 News List

Quanta sees 24% rise in Q1 earnings

NOTEBOOK POWER The company said the Vista operating system and Santa Rosa platform will fuel market demand, especially in emerging markets

By Jason Tan  /  STAFF REPORTER

Quanta Computer Inc (廣達電腦), the world's biggest contract maker of notebook computers, posted a 24 percent rise in its first-quarter earnings on the back of increased notebook shipments.

The company's unconsolidated net income in the first quarter rose to NT$3.4 billion (US$102 million), or NT$1.02 per share, compared to NT$2.75 billion, or NT$0.85 a share, a year ago.

Sales also increased by 36 percent to NT$143.23 billion, from NT$104.98 billion a year ago.

The company shipped 6.2 million laptop computers in the first quarter, up from 4.1 million the same period a year ago, Jason Lin (林群傑), Quanta's director of the strategic investment division, told reporters at the company's Taoyuan headquarters.

Notebook shipments will grow by 10 percent to hit 7 million units in the current quarter, he added.

"The Vista operating system and new Santa Rosa platform are expected to further fuel market demand, especially in the consumer segment and emerging markets," Lin said.

On the back of these factors, Quanta's portable computer shipments for the whole year will total more than 25 million units, up from last year's 19 million units, it said.

Smaller rival Compal Electronics Inc (仁寶電腦) said on Monday it aims to churn out more than 20 million notebooks this year, up from last year's 14.5 million.

To improve saggy gross margins, which dropped to 4 percent in the first quarter from 5.3 percent a year ago, Quanta is on track to expand its non-notebook products, said Quanta president Michael Wang (王震華).

He said that these products, including handheld devices, servers, flat-panel TVs and automobile electronics, will account for 25 percent of total revenues this year, up from 20 percent last year.

"This product mix has the chance to contribute more than 25 percent of total profit margins," Wang said.

Industry watchers applauded the diversification move.

"Quanta's non-core business is taking off, especially in global positioning system devices. This will help improve overall margins in the future," said Simon Yang (楊勝帆), an analyst at Topology Research Institute (拓墣產業研究所).

He said Quanta would also benefit from new Macbook orders from Apple Inc.

Quanta also announced the delay of its One Laptop per Child (OLPC) project shipments to the fourth quarter instead of the third.

The delay would allow for new components, including a faster central processing unit and larger memory and storage, to be bundled into the low-cost computers, Lin said, adding: "More testing needs to be done after the new components are included."

Quanta said in September it expected to ship as many as 10 million units of the low-cost computers in the first year.

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