Sat, Oct 29, 2011 - Page 12 News List

Acer’s Q4 will be watered down by Thailand’s floods

By Jason Tan  /  Staff Reporter

Acer Inc (宏碁), the world’s fourth-largest PC brand, yesterday said it expected fourth-quarter revenue to drop 5 percent to 10 percent from the third quarter because the flooding in Thailand has disrupted hard-disk production.

In a previous forecast, the firm said it would break even this quarter.

The company told an investor conference that fourth-quarter revenue would drop from NT$117.89 billion (US$3.95 billion) in the third quarter because of the severe flooding in Thailand.

“It is hard to assess the impact until the floods have fully receded,” company president Jim Wong (翁建仁) said.

The disruption has affected the price of hard disks, which have risen 5 percent to 20 percent, and Acer plans to start to reflect those costs on the market starting from the middle of next month, he said.

The company, which saw third-quarter losses narrow to NT$1.09 billion from a loss of NT$6.79 billion in the second quarter, said it aims to break even in the fourth quarter.

Operating margin this quarter will be as much as 1 percent, from minus-1.1 percent in the third quarter, Wong said.

The turnaround is due to strong demand for Acer’s ultrabooks and the light, powerful notebooks offer a higher margin, chairman J. T. Wang (王振堂) said.

Acer said it would ship between 250,000 and 300,000 ultrabooks in the fourth quarter, and ultrabooks would account for 25 percent to 35 percent of its total notebook shipments next year.

The company is banking on sales of ultrabooks to fuel fourth-quarter shipments.

Ultrabook production lines are not facing a hard-drive shortage because their drives are made in China, and the company is the only maker that offers hard drive-based ultrabooks in mass volumes, Wang said.

Other PC makers such as Asustek Computer Inc (華碩) ship ultrabooks that only have solid state drives.

Acer, whose global PC ranking dropped to No. 4 in the third quarter because of its restructuring efforts, said its total PC shipments should grow 10 percent next year, in line with the industry’s momentum.

“Acer’s fourth-quarter forecasts seem conservative,” said Kirk Yang (楊應超), managing director of Barclays Capital Asia Ltd.

“The company’s performance had hit bottom and it will gradually pick up steam, but how fast the recovery will be remains to be seen,” Yang said.

Meanwhile, Taiwan’s third-largest contract notebook PC maker, Wistron Corp (緯創), yesterday said it expects 20 percent growth across major product categories next year.

Except for LCD TV shipments — which will remain flat — notebooks, tablets, handheld devices, desktops and monitors will see shipments expand 20 percent next year, Wistron chairman Simon Lin (林憲民) told an investor conference.

It expects to see the impact ofm the component shortage caused by Thailand’s floods only in December, and Lin said fourth-quarter notebook shipments would still grow slightly from the third.

Wistron posted a 24.93 percent drop in earnings in the first three quarters to NT$6.7 billion, while revenue during the same period rose 1.91 percent from last year to NT$463.11 billion.

Wistron shares closed up 1.23 percent to NT$37.05 on the Taiwan Stock Exchange before the conference, Acer shares inched up 0.71 percent to NT$35.4.

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