Sat, Feb 12, 2011 - Page 12 News List

Asustek’s Q4 net profit fell 29 percent

OPTIMISM:The PC supplier said it was confident that revenue would post double-digit percentage growth this year on increased shipments to emerging markets

By Jason Tan  /  Staff Reporter

Asustek Computer Inc (華碩), the world’s No. 6 PC brand, yesterday reported that fourth-quarter net income dropped 29 percent from a year ago to NT$4.02 billion (US$138 million) because of non-operating losses, including from currency exchange.

However, the company voiced optimism that revenue would grow by a double-digit percentage this year, bolstered by shipments to fast-growing emerging markets.

Net profit last quarter was down 4 percent compared with the third quarter, a company statement said.

Consolidated revenue in the quarter ending December was NT$83.69 billion, down 1 percent from the corresponding quarter a year ago, but up 2 percent from the third quarter.

Revenue in the first quarter is expected to continue to be weak, dropping 10 percent sequentially on the back of a stronger New Taiwan dollar and a chipset recall by Intel Corp, chief financial officer David Chang (張偉明) told an investor conference.

Notebook shipments this quarter are forecast to drop 8 percent sequentially to 4.2 million, he said.

“We won’t be overly optimistic, but we have confidence in Asustek’s [overall business performance] this year,” said Chang, adding that revenue would climb by a double-digit percentage this year with momentum coming from emerging markets such as Southeast Asia, Mexico, India, Brazil and Indonesia.

The company plans to have key executives travel to Brazil — a key market to promote netbook sales — and to team up with more domestic channels to boost shipments in emerging markets, according to CEO Jerry Shen (沈振來).

Last year, Europe and the US accounted for 43 percent of Asustek’s sales, while Asia took 40 percent.

“We believe PC demand from Europe and the US continues to suffer from maturity and consumers’ spending has shifted to smartphones and tablets in the first quarter,” Macquarie Research analyst Daniel Chang (張博淇) said.

Nonetheless, Macquarie prefers Asustek over its bigger rival, Acer Inc (宏碁), saying Asustek offers better growth momentum, stable operating profit margin and lower valuations, Chang said.

Asustek said it had set a shipment target of 20 million notebooks this year, up from 16.9 million last year.

Of that, 14 million would be conventional notebooks and 6 million would be Eee netbooks. The company shipped 10.9 million conventional notebooks and 6 million Eee PCs last year.

The notebook shipments do not include “Eee Pad” tablet PCs, with Asustek aiming to ship 2 million units and grabbing at least 10 percent of the non-iPad market this year. Acer is aiming for 30 percent of the non-iPad market.

The company has mobilized 200 engineers who were working in its smartphone division to focus on the development of the Eee Pad’s applications, Shen said.

Asustek fell 6.3 percent to NT$231.50 on the Taiwan Stock Exchange yesterday before the earnings announcement, outpacing the TAIEX’s 3 percent drop.

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