Thu, Apr 30, 2009 - Page 12 News List

Wistron Corp posts higher revenues but profits fall 15.5%

FEELING THE SQUEEZE The contract notebook maker said it expected operating margins to return to normal levels by the third or fourth quarter

By Elizabeth Tchii  /  STAFF REPORTER

Despite booking a 29.6 percent increase in revenues in the first quarter compared with the same period last year, local contract notebook maker Wistron Corp (緯創) reported a 15.5 percent drop in profits during the same period because of adverse market conditions.

Net profit was NT$1.42 billion (US$42 million) in the first quarter, or NT$0.94 earnings per share, down from NT$1.68 billion, or NT$1.21 earnings per share, in the same period last year. Revenues were NT$112.52 million for the quarter.

Wistron expects operating margins to return to normal levels of between 5 percent and 6 percent by the third quarter or fourth quarter, after a 4.34 percent operating margin in the first quarter.

“The first quarter operating margin was below expectations because we are still in a transition period after consolidating Lite-On Technology Corp’s (光寶科技) LCD monitor business,” Wistron chairman and chief executive officer Simon Lin (林憲銘) said during a teleconference call with investors yesterday.

To improve its operating margin, Wistron is adjusting its product mix on the notebook side, Lin said. The company has seen order visibility into the July to August period and forecasts quarterly growth of 10 percent in shipments for this quarter.

Additionally, the company’s board approved a filing with the regulators requesting that the company issue no more than 150 million new shares in the form of global depositary receipts this quarter.

Lin said another 150 million shares might be issued in the second half of the year should market conditions improve.

Quanta Computer Inc (廣達電腦), the world’s largest contract PC maker, also said it was seeing more visibility from major notebook brand names and it is also confident about the second half of the year, the company’s vice chairman C.C. Leung (梁次震) told investors at a conference yesterday.

Despite the traditional slow first quarter, Quanta has orders out to three months, Leung said. The company forecasts that it will ship 40 million notebooks this year, up 10 percent from last year, he said.

For the first quarter, Quanta booked NT$4.38 billion in net profits, up 9.5 percent from NT$4 billion posted in the same period last year. Earnings per share was NT$1.22, compared with last year’s NT$1.16.

Compal Electronics Inc (仁寶), the second-largest contract PC maker, yesterday posted a 13 percent decline in first-quarter net profits at NT$2.80 billion, or NT$0.84 earnings per share, compared with the same period last year.

The Neihu-based company said because of its heavy emphasis on notebook production, first-quarter sales reached NT$109.18 billion, a 2 percent quarterly increase and an annual increase of 7 percent.

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