Sat, Apr 28, 2012 - Page 11 News List

Quanta’s Q1 profits and sales fall due to low demand

By Kevin Chen  /  Staff reporter

Quanta Computer Inc (廣達) yesterday reported falling profits and sales in the first quarter due to weak demand, but said it expected mild improvement in the second quarter and much stronger growth in the second half of the year.

“While the outlook for global economy remains unclear, there is no crisis [at the moment],” local cable TV network UBN yesterday quoted Quanta chairman Barry Lam (林百里) as saying at a press conference at the company’s headquarters in Gueishan Township (龜山), Taoyuan County.

Lam said the company would target to maintain a steady profit growth in the upcoming quarters, supported by launches of new products. His remark came as Quanta, the world’s largest maker of notebook computers, reported a net income of NT$5.17 billion (US$176.3 million) in the first quarter, down 21.9 percent quarter-on-quarter and 10.68 percent year-on-year.

Earnings per share (EPS) were NT$1.33 in the first three months, compared with NT$1.71 in the previous quarter and NT$1.49 a year earlier. The first-quarter EPS was lower than Barclays Capital Inc’s forecast of NT$1.42, but higher than a median estimate of NT$1.3 in a Bloomberg News survey.

First-quarter gross margin of 4.2 percent was down from 4.6 percent in the previous quarter, but higher than 3.6 percent a year earlier.

Its operating margin was 1.8 percent in the first three months of the year, flat from the previous three months, but up from 1.5 percent the year before, according to the company’s financial report.

First-quarter net sales totaled NT$236.22 billion, compared with NT$300.4 billion in the previous three months and NT$251.61 billion a year earlier, the report showed.

The Taoyuan-based company said notebook shipments totaled 13.2 million units in the first quarter, a decline of 5.04 percent from the previous quarter.

However, it forecast a sequential increase of 5 percent to 10 percent this quarter thanks to new product launches by major PC vendors.

“The introduction of new Ivy Bridge chips by Intel in May should help boost PC demand [this quarter],” Quanta vice chairman C.C. Leung (梁次震) said at the press conference.

Barclays forecast a 10 percent quarterly increase in revenue this quarter, benefiting mainly from the launches of higher-margin products like Apple’s new MacBooks.

Other higher-margin, non-PC products, such as tablets, servers and cloud technology-based items, will make more revenue contribution this year — hitting 30 percent to 35 percent of total revenue from about 27 percent last year — as Quanta looks to improve its bottom line in the face of fierce competition in the low-margin PC market.

“There is a high possibility that tablet shipments will increase by 70 percent this year from last year,” Leung said, without providing unit figures.

Meanwhile, Wistron Corp (緯創), which replaced Compal Electronics Inc (仁寶) as the world’s No. 2 contract laptop maker in the first quarter, yesterday said net income reached NT$1.87 billion, or NT$0.9 per share, in the quarter.

The number was down 7 percent from NT$2.01 billion, or NT$1.02 per share, in the first quarter of last year. On a quarterly basis, that was also 21 percent less than NT$2.36 billion, or NT$1.13 a share, in the final quarter of last year, according to the company’s filing to the Taiwan Stock Exchange.

Wistron said the company’s board also approved a proposal to distribute a cash dividend of NT$2.2 per share and NT$0.5 in stock dividend to shareholders based on last year's net income of NT$9.07 billion, or NT$4.36 a share.

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