Quanta Computer Inc (廣達電腦), the world’s biggest contract laptop computer maker, yesterday said net income expanded 5.1 percent last quarter from a year ago, but it projected weaker-than-expected growth in shipments this quarter, blaming weak economic growth prospects in the US and Europe.
Shipments of notebooks are expected to be flat, or increase slightly this quarter, from 14.3 million units in the second quarter, chief financial executive Elton Yang (楊俊烈) told a media briefing, lower than most analysts’ estimates of 5 percent to 10 percent quarterly growth.
As Quanta’s customers are expected to ship new models for the Christmas shopping season, the company expects shipments to gather steam in the final quarter, bringing second-half shipments up 5 percent from the 27.4 million units shipped in the first half, Yang said, adding that growth would be weaker than usual.
For the full year, Quanta believes that its goal of growing 10 percent annually is still reachable, meaning shipments would rise to 57.3 million from last year’s 52.3 million units, while local rival Compal Electronics Inc (仁寶) yesterday slashed its shipments target by 12.5 percent to 42 million units, citing sluggish demand and inventory adjustments by its customers, primarily Acer Inc (宏碁).
“Originally, we were aiming even higher,” Yang said.
Quanta makes the ultra-thin Macbook for Apple and it also supplies standard laptops to clients that include Hewlett-Packard Co (HP), Dell Inc and China’s Lenovo Group Ltd (聯想).
In the quarter ending in June, net income expanded to NT$5.37 billion (US$185 million) compared with NT$5.1 billion the previous year, but it was down about 6 percent from NT$5.71 billion in the first quarter, the company’s financial statement showed.
“The growth of the notebook industry will slow down as tablet devices are replacing notebooks ... as tablet delivers faster and easier [Internet] access to content stored in cloud computing-enabled hardware,” Quanta chairman Barry Lam (林百里) told reporters.
Lam said growth from cloud computing products would be evident next year and in 2013 in terms of revenues and profits because of higher margins.
Lam declined to comment on potential changes to the global contract notebook landscape after HP announced its intention to spin off its computer division.
“For Quanta, laptops are [just] one of the firm’s revenue sources and the company will continue to manufacture notebooks [for customers] and to develop new models featuring new technologies, while beefing up investment the non-laptop business, primarily cloud computing hardware and services,” Lam said.
By the end of the third quarter, revenues from non-laptop business will make up between 25 percent and 30 percent of the firm’s overall revenues, up from 25 percent of last quarter’s revenues, with the fastest growth in cloud-computing enabling equipment, such as servers, storage devices and tablets, Yang said.
Quanta said it is targeting shipping several million tablet devices this year.
Gross margin improved to 3.45 percent last quarter, from 3.42 percent in the same period last year, but unfavorable foreign exchange rates cut gross margin from 3.57 percent in the first quarter.
This quarter, gross margin would be under pressure as Quanta expects to ship more lower-margin products, the company said.
Quanta shares advanced 1.91 percent to NT$58.7 yesterday, outpacing the benchmark TAIEX, which rose 1.24 percent.
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