Fri, Oct 29, 2010 - Page 11 News List

Asustek reports strong quarterly profit growth

STEADY AHEAD:The company’s notebook shipments are expected to continue climbing this quarter, while netbooks, which fell last quarter, could pick up steam

By Ted Yang  /  Staff Reporter

Asustek Computer Inc (華碩), the world’s No. 5 PC brand, yesterday posted a better-than-expected net profit of NT$4.21 billion (US$136.6 million) in the third quarter on the back of strong demand from Europe and sufficient inventories.

That represented a rise of 43 percent from NT$2.94 billion in the second quarter and about 5 percent from NT$4.02 billion a year earlier.

The company said pro-forma earnings per share were NT$6.71 last quarter, higher than the NT$4.69 recorded in the second quarter and NT$6.40 a year earlier, while gross margin climbed to 13.9 percent from 11.9 percent in the previous quarter, compared with 16 percent one year ago.

“The quarterly rise in gross margin was due chiefly to reduced key component costs in September caused by decreased inventories,” company CEO Jerry Shen (沈振來) told reporters on the sidelines of an investor conference yesterday.

Shen played down the impact of the appreciation of the New Taiwan dollar on the company’s third-quarter performance, saying that necessary measures to hedge exchange rate losses were adopted in the second quarter.

Revenue was NT$82 billion in the third quarter, up 9 percent from a quarter earlier, when the company saw sales of NT$75.23 billion, chief financial officer David Chang (張偉明) told the investor conference. The figure rose 21 percent on a yearly basis.

“Third-quarter data was better than our expectations,” Chang said.

He added that revenue would continue to grow this quarter, with the operating margin staying at 4 to 5 percent.

“Achieving this goal shouldn’t be a problem,” he said.

Operating margin was 4.2 percent in the third quarter, compared with 3.9 percent the previous quarter, company data showed.

In the first three quarters, net income amounted to NT$12.46 billion, up 83 percent from the same period last year, with the gross margin climbing to 13.1 percent from 10.7 percent a year earlier.

Shipments of notebooks are expected to rise to 3.1 million units this quarter after a sequential gain of 20.83 percent to 2.9 million units in the third quarter, Chang said.

However, shipments of Eee netbook PCs dropped 7 percent from a quarter earlier to 1.4 million units because of the release of tablet computers, although the company expected them to rebound this quarter.

“The impact of the iPad on shipments of Eee PCs is insignificant outside the US and the UK,” Shen said, adding that demand for Eee PCs in Europe remained strong.

The company forecast that shipments of Eee PCs would reach 1.5 million units in the fourth quarter.

Asustek rose 1.46 percent to NT$243.50 yesterday, outpacing the benchmark TAIEX, which edged 0.76 percent higher, Taiwan Stock Exchange data showed.

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