Sat, Jan 10, 2009 - Page 12 News List

Asustek reports lackluster sales

DOWNTURN Credit Suisse cut Asustek’s rating to ‘underperform’ from ‘neutral’ and Morgan Stanley reduced the company’s rating to ‘underweight’ from ‘equalweight’

By Elizabeth Tchii  /  STAFF REPORTER

Asustek Computer Inc (華碩電腦) and local laptop original design manufacturers yesterday reported lackluster sales figures for last month, citing slowing consumer spending.

Following an emergency downward fourth-quarter guidance issued on Thursday, Asustek posted dismal sales of NT$16.1 billion last month, a 20.3 percent decrease year-on-year and a 35 percent decrease month-on-month.

Moreover, the netbook pioneer’s quarter-on-quarter sales dropped 13.67 percent to NT$67.6 billion (US$486 million) in the fourth quarter which is in line with its Thursday revisions.

The result did not surprise analysts as many have been lowering their earning forecasts in the wake of slowing consumer demand worldwide starting in October.

Credit Suisse cut Asustek’s rating to “underperform” from “neutral” and Morgan Stanley reduced the company’s rating to “underweight” from “equalweight.” Macquarie Group also cut the stock to “underperform,” the foreign financial institutions said.

Despite last month’s disappointing figures, Asustek’s unaudited annual revenue rose 17 percent year-on-year to NT$266.9 billion last year, buoyed by stellar performances in the first three quarters.

Going forward, the company said it will focus on inventory control, business streamlining and currency risk management in order to produce better margins.

As PC vendors worldwide are confronted by weak consumer demand, local original design manufacturers, Pegatron Corp (和聯), Unihan Corp (永碩), Wistron Co (緯創) and Qisda Corp (佳世達) also saw their manufacturing orders sharply reduced in the final month of the year.

Pegatron and Unihan, the former production arms of Asustek, registered declining sales last month, with NT$19.57 billion at Pegatron and NT$8.94 billion at Unihan.

With Asustek focusing on international brand building since last January, Pegatron now oversees PC manufacturing while Unihan is responsible for the production of molds, cover and non-computer electronics.

The companies said yesterday that among their three product lines: motherboard/desktop, notebook and graphic/TV card, notebook business demonstrated the sharpest retraction of 47 percent, while the other two only faced low-single digit reductions.

The two firms’ accumulated full year revenues reached NT$465.73 billion last year.

Meanwhile, Qisda’s sales during last month contracted 14.5 percent month-on-month and 18.6 percent year-on-year to NT$6.89 billion. The company concentrates heavily on the production of liquid-crystal-display (LCD) monitors, commercial LCD TVs and cellphones.

The Taoyuan-based company produces precisely the products that have been hit the hardest in the economic downturn.

The only anomaly in the group, Wistron, saw its sales last moth grow 5.48 percent month-on-month, and 56.27 percent year-on-year to a stunning NT$46.73 billion.

Wistron, which focuses on notebook production, saw its notebook orders shrink from 2.7 million units in October, to 2 million units in November, but somehow delivered a positive performance to the surprise of analysts.

The computer peripheral manufacturer’s full year consolidated revenues grew 55.25 percent from 2007’s NT$286.75 billion to NT$445.17 billion, despite its earlier cuts in fourth quarter shipment forecast figures.

Mike Liang (梁惠明), senior manager of investor relations at Wistron told reporters in October that the company forecast shipments of 25 million to 28 million units of notebooks this year.

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