Tue, Aug 25, 2009 - Page 12 News List

Quanta profits beat forecasts on efficiency, cuts

BACK TO SCHOOL The company’s president said demand for new notebooks from students returning to school would help spur shipments next month

By Lisa Wang  /  STAFF REPORTER, IN TAOYUAN

Quanta Computer Inc (廣達電腦), the world’s top laptop computer maker on a contract basis, yesterday posted better-than-expected quarterly earnings on better operational efficiency and cost cuts that offset the adverse impact of the economic slump.

During the second quarter, Quanta made NT$4.9 billion (US$149 million), or NT$1.34 per share, in net profits, down 3 percent from NT$5.02 billion for the same period last year, the company’s financial statement said. Operating income spiked 72 percent year-on-year to NT$5.94 billion, from NT$3.46 billion.

“The results beat my expectations and market consensus forecasts,” said Wang Wanli (王萬里), head of Research at HSBC Securities’ Taiwan branch, saying that he was impressed by Quanta’s performance.

Wang had expected Quanta to earn NT$3.8 billion in the second quarter.

Gross margin improved to 5.9 percent in the quarter ending on June 30, the highest level in recent years, from 4.6 percent a year ago, helped by aggressive cost reduction, Quanta said.

Notebook computer shipments may grow by more than 20 percent in the third quarter, compared with 7.9 million units shipped last quarter, Quanta vice chairman and president C.C. Leung (梁次震) told reporters.

“We are seeing back-to-school demand recovering. September and October will be better months [in terms of shipments],” Leung said.

Fast recovery in demand, however, led to shortages of key components such as liquid-crystal displays (LCD) this quarter, Quanta said. However, the company said the supply constraint should not have a significant impact on its shipments.

“The forecast is in line with our expectations. The seasonal demand is just OK as consumers are holding off on purchasing new computers ahead of the sale of Windows 7 in the fourth quarter,” Wang said.

Wang gave an “overweight” rating on Quanta.

The growth momentum is expected to extend into the final quarter, during which notebook shipments may increase by an additional 20 percent quarter-on-quarter, Leung said.

For the full year, Quanta’s original shipment forecast of 36 million units remained unchanged, which is flat compared with last year.

“Next year, Quanta will grow faster than the overall notebook computer industry,” Leung said.

Next year, global laptop computer shipments could grow by 15 percent year-on-year, Leung said, citing unspecific research house’s forecast.

Quanta revenues dropped 13 percent to NT$174.98 bilion in the April-June period, from NT$200.07 billion a year ago.

Quanta shares jumped 5.37 percent to NT$62.8, while local rival Compal Electronics Inc (仁寶) rose 2.31 percent to NT$31 yesterday.

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