Shares of notebook maker Quanta Computer Inc (廣達電腦) moved sharply higher yesterday after the company reported a better-than-expected fourth-quarter margin, dealers said.
Many investors have been upbeat about Quanta’s earnings outlook, anticipating that the company will continue to adjust its product mix to improve its bottom line, dealers said.
The stock rallied 6.92 percent to close at NT$77.30 yesterday, outperforming the benchmark index, which gained 0.77 percent.
“The market is hailing Quanta’s efforts in product adjustments, which have boosted its gross margin,” Concord Securities (康和證券) analyst Henry Sun (孫豪志) said.
Quanta reported on Thursday that its gross margin for the fourth quarter of last year hit 4.57 percent, up from 3.65 percent in the third quarter. It was the first time in seven quarters that the company’s gross margin exceeded 4 percent. Sun said he was expecting about 4 percent.
“The real number was better than expected, indicating that the company is moving in the right direction by adding higher-margin products to its product line,” Sun said.
Notebook computers now account for less than 70 percent of Quanta’s total revenue, alleviating the impact of fierce competition in the global PC market. Other products, such as servers and cloud technology-based items, which command higher margins, have been playing a bigger role in the company’s production, the analyst said.
During the October-December period, Quanta posted NT$6.53 billion in net profit, or earnings per share (EPS) of NT$1.71.
For the whole of last year, the company recorded NT$23.50 billion in net profit, up 26.39 percent from 2010, while its EPS stood at NT$6.02, compared with NT$4.89 a year earlier.
Quanta said sales this quarter are expected to fall from the fourth quarter’s NT$300.4 billion as the first quarter is usually a slow season. Gross margin is also likely to trend lower, it said.
However, the situation will likely improve from the second quarter onward, as new notebook launches stimulate buying interest, it said.
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