Fri, Oct 28, 2011 - Page 12 News List

Pegatron makes Q3 profit, Inventec to drop 400 jobs

By Amy Su  /  Staff Reporter

Contract notebook maker Pegatron Corp (和碩) yesterday said it swung into a profit in the third quarter, but painted a less rosy picture for the current quarter, while rival Inventec Corp (英業達) announced it is slashing 400 jobs as part of its latest restructuring plans.

Pegatron reported a net profit of NT$366 million (US$12.17 million), or NT$0.17 per share, in the third quarter, compared with a net loss of NT$671 million, or NT$0.3 a share, in the second quarter.

“The improving utilization in the third quarter drove up the company’s gross margin, helping the company to turn loss into gain,” Pegatron chief financial officer Charles Lin (林秋炭) told an investors’ conference.

The company’s gross margin increased by 0.5 percentage points from a quarter ago to 2.1 percent for the third quarter.

In addition, higher-than-expected quarterly revenue would be the other factor leading the company back into the black, Lin said. Pegatron posted revenue of NT$156 billion for the July-to-September period, up 49 percent from the previous quarter.

Shipments on computing and communications devices, which accounted for about 80 percent of the company’s revenue, rose 136 percent from the previous quarter in the third quarter, while demand in the consumer electronics segment — which accounts for the other 20 percent — also showed the seasonal peak, he added.

As for the current quarter, Pegatron chief executive Jason Cheng (程建中) said he expected the company’s notebook shipments to decline by 10 to 15 percent from a quarter earlier, whereas shipments of motherboards and desktop PCs would drop by 15 to 20 percent.

The slowing demand in consumer electronics worldwide has also affected Inventec, which yesterday confirmed in a stock exchange filing that it would cut 400 jobs to reflect “changes in the macroeconomic environment and external factors as well as the closure of tablet computer production project.”

Inventec said in the filing that the downsizing is not expected to affect its financial profile and business operations, because tablet production accounted for only a small part of its total sales.

The latest move came after Hewlett Packard Co, a major customer of Inventec, announced in August that it was stopping production of its TouchPad and phones based on the webOS mobile operating system.

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