Thu, Aug 05, 2010 - Page 11 News List

Acer announces after-tax profit of NT$6.89 billion

TRUMPING THE OPPOSITION A Citigroup Global Markets analyst said he expected Acer to deliver stronger Q3 shipment growth than most of its rivals

By Kevin Chen  /  STAFF REPORTER

Acer Inc (宏碁), which Gartner ranked as the world’s second-largest PC brand in the second quarter, said yesterday its consolidated after-tax profit was NT$6.89 billion (US$213.5 million) in the first half of the year, or NT$2.60 in earnings per share (EPS).

The first-half figure represented a 57.76 percent increase from a net profit of NT$4.37 billion, or NT$1.66 in EPS, during the same period of last year, the Taipei-based company said in a statement.

Revenue for the first six months totaled NT$312.35 billion, which was 31.15 percent higher than the NT$238.17 billion of a year earlier, while operating income reached NT$8.5 billion, up 52 percent from NT$5.6 billion last year.

Acer said the preliminary first-half financial results were unaudited and the consolidated figures include those from subsidiaries of which Acer has at least 50 percent ownership.

The firm did not offer an explanation behind the strong first-half showing.

Acer shares fell 1.57 percent to NT$87.6 in Taipei trading ahead of the release of its first-half financial results. The stock has declined 8.94 percent so far this year, compared with a fall of 2.63 percent on the benchmark TAIEX.

In the second quarter, Acer’s preliminary results listed its consolidated net profit as NT$3.59 billion, up 53.55 percent from NT$2.34 billion a year earlier and 9.12 percent higher than the NT$3.29 billion in the first quarter. That was also 18.87 percent higher than the NT$3.02 billion that Credit Suisse analyst Robert Cheng (鄭勝榮) expected.

The company’s quarterly revenue grew 26.11 percent to NT$150.2 billion from NT$119.1 billion a year earlier, while operating income was NT$4.13 billion, up 36 percent year-on-year, the statement said.

Acer’s operating income in the second quarter was 5.77 percent lower than NT$4.39 billion in the first quarter, but 10.39 percent higher than Citigroup’s estimate, indicating a better-than-expected operating margin of 2.8 percent. The company posted an operating margin of 2.7 percent in the first quarter.

“The highlight of the result was that Acer managed to deliver a flat operating margin quarter-on-quarter in the second quarter, despite sharp euro depreciation,” Citigroup Global Markets analyst Kevin Chang (張凱偉) said in a client note yesterday.

Citigroup predicted Acer would post a 2.4 percent operating margin in the second quarter, while Credit Suisse forecast 2.7 percent.

“The operating margin was not necessarily a surprise as the company has been giving some indication that its operating margin could be better than market expectation. However, it does demonstrate Acer’s superior execution,” he said.

Chang said he expected Acer to deliver stronger shipment growth than most of its rivals in the third quarter, because the firm started to clear channel inventory much earlier than competitors amid concerns of poor back-to-school demand in the US and a lack of demand recovery in Europe.

Citigroup now forecasts Acer will ship 9.5 million units in the third quarter, up about 10 to 15 percent from the second quarter, while Credit Suisse expects Acer to post a 16.6 percent quarterly growth in revenue to NT$175.13 billion in the July to September period.

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