Asustek Computer Inc (華碩電腦), the world’s largest computer motherboard maker, posted disappointing second-quarter results yesterday, while predicting shipments for its notebook computers will grow by 30 percent and for Eee PCs by 50 percent in the current quarter from last quarter.
Net income dropped 21.9 percent quarter-on-quarter, or 17.6 percent year-on-year, to NT$5.64 billion (US$183 million) in the second quarter, figures released at an investors’ conference in Taipei showed.
The second-quarter profit of NT$5.64 billion was the company’s weakest quarterly performance in the past eight quarters since reporting a profit of NT$2.9 billion in the second quarter of 2006.
It also fared worse than forecast by Citigroup analyst Eve Jung (戎宜蘋) in her Aug. 1 report, in which she said that net income was expected to drop 18 percent quarter-on-quarter or 14 percent year-on-year to NT$5.92 billion.
Asustek said its second-quarter revenue fell by 7.8 percent quarter-on-quarter to NT$58.06 billion from last quarter’s NT$62.97 billion, while operating income dropped by a precipitous 34 percent to NT$4.4 billion in the second quarter.
Asustek chief executive officer Jerry Shen (沈振來) said the second-quarter figures were lower than expected because the company produced too many Eee PC products and too many notebook models in the quarter, so it wasn’t able to rely on economies of scale to lower costs.
“Demand remained strong ... although in China the demand was less than anticipated because of the plunging stock market and earthquake,” he said.
Asustek, which also produces brandname personal computers, went through corporate restructuring earlier this year to separate its contract production business into two firms — Pegatron Corp (和碩) and Unihan Technology Corp (永碩).
Following the spinoff scheme, Asustek has been focused on producing low priced netbooks in its Eee PC series. The latest results showed that the Eee product mix had gone from contributing 10 percent of the company’s revenue in the first quarter to 18 percent in the second quarter, while notebook and motherboard revenue contribution shrank 3 percent and 7 percent respectively quarter-on-quarter in the second quarter.
Looking forward, Shen said: “Notebook and Eee PC shipment targets are both 1.5 million to 1.8 million units in the third quarter, which represent a quarter-on-quarter growth in excess of 30 percent and 50 percent respectively.”
But gross margin is anticipated to be between 16 percent and 20 percent this quarter, down from 23 percent in the second quarter, Shen said, which he attributed to higher marketing, servicing and shipping costs in the wake of upcoming competition in the notebook business.
“There will be increased netbook competition from various computer makers starting in August,” Shen said.
The company will also outsource 30 percent of its total notebook/Eee PC production next year, he added.
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