Tue, Oct 28, 2008 - Page 12 News List

Compal cautious despite strong earnings

TIMES ARE CHANGING The company said next year would be critical as it would be the first time that notebooks surpassed desktops in terms of PC market share

By Elizabeth Tchii  /  STAFF REPORTER

Compal Electronics Inc (仁寶電腦), the world’s second-largest notebook maker, reported strong earnings yesterday, but remained cautious about the fourth quarter and lowered its full-year forecast.

The original design manufacturer (ODM) posted NT$110.01 billion (US$3.28 billion) in third-quarter revenue, an increase of 27 percent from last quarter, but a decline of 4 percent from the same period last year.

Operating income and net income reached NT$3.19 billion and NT$3.48 billion in the third quarter, a 37 percent and 8 percent increase respectively from the second quarter. Earnings per share (EPS) for the third quarter were NT$0.98, compared with last quarter’s NT$0.83 and last year’s NT0.97.

“We are seeing declines in fourth quarter notebook demand starting in October. Customer orders are coming in lower than previously anticipated,” Compal president Ray Chen (陳瑞聰) said at an investor briefing yesterday. “We’re looking at single digit growth for the fourth quarter, and our focus will be on cost control amid waning corporate and consumer spending.”

Compal’s original full-year notebook forecast — including low cost netbooks — was 28 million units. Chen lowered that to 27 million. The full-year target for next year will be 35 million, he said.

Chen believes shipments of netbooks will comprise 15 percent to 20 percent of Compal’s total notebook shipments next year. This increase in market share will come mostly at the expense of desktops, he said.

Chen said next year would be critical because it would be the first time notebooks surpassed desktops in terms of PC market share.

“Like the technological transition from old cathode-ray-tube TVs to liquid-crystal-display [LCD] TVs, the mass adoption of notebooks will be fast and furious. It will probably take about three to four years’ time, then all of a sudden, you’ll hardly see desktops in stores anymore,” he said.

Netbooks will appeal to cost-conscious consumers in emerging markets as well as people purchasing their first laptops, such as students and young adults, Chen said.

But “don’t underestimate the power of regular laptops. For professionals and consumers seeking more powerful PCs, they are irreplaceable,” he said.

Average selling prices (ASP) were falling for notebooks, but with the trend toward sophistication, style and design, such decreases would be controlled by increases in raw material costs, he said.

Chen told yesterday’s briefing that Intel had reduced its global notebook demand forecast for this year during the third quarter from 135 million units to 130 million units. The computer chip maker is cautious about next year, setting its global notebook demand at 160 million to 165 million units.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top