Fri, Feb 13, 2009 - Page 12 News List

ASE reports its first quarterly loss in 14 quarters

By Kevin Chen  /  STAFF REPORTER

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday reported its first quarterly loss in 14 quarters, adding that it expected losses to continue in the current quarter amid a global slowdown in demand.

ASE, the world’s largest chip packager and tester, said it swung to a net loss of NT$800 million (US$23.5 million) in the three months ending Dec. 31. That translates into a loss of NT$0.15 per share in the fourth quarter, the company said in a statement.

The company reported a profit of NT$2.21 billion in the previous quarter and NT$3.7 billion a year earlier.

ASE posted an operating profit of NT$983 million last quarter, down from NT$3.9 billion in the previous three months. Accordingly, its operating margin dropped to 5 percent last quarter from 15 percent in the third quarter.

The last time the Kaohsiung-based company reported a quarterly loss was in the second quarter of 2005, when it saw NT$9.1 billion in losses.

“Sales are expected to rebound gradually this month and next after hitting a bottom last month,” ASE chief financial officer Joseph Tung (董宏思) told an investor conference. “However, there are still uncertainties about the global economy this year.”

Tung said he expected revenue to fall by between 35 percent and 40 percent this quarter from last quarter, and factory utilization to slide further to 40 percent — far below the 55 percent to 60 percent needed to break even.

That meant the company would continue to record losses this quarter, although Tung did not offer an estimate of potential losses.

To help it through the economic downturn, ASE began implementing various cost-cutting measures in October, including asking employees to take unpaid leave, salary cuts of between 10 percent and 15 percent among its top management, as well as adjusting employee bonuses.

That helped lower the company's operating expenses in the fourth quarter to NT$2.2 billion from NT$2.7 billion in the third quarter, the company said in the statement.

ASE expects to see another NT$350 million drop in operating expenses this quarter, Tung said.

For the full year, ASE reported a profit of NT$6.16 billion, or NT$1.12 per share, a decline of 49 percent from 2007. Gross margin last year was 23.9 percent, down from 28.8 percent in the previous year, while revenues declined 7 percent to NT$94.43 billion, the company said.

ADDITIONAL REPORTING BY HUNG YU-FANG

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