Sat, Aug 18, 2012 - Page 13 News List

Acer Q2 profit misses forecast on tax

CONFIDENCE:Acer officials said the firm had seen growth in Eastern Europe, Latin America and in Asia, and more was expected with the release of new products

By George Liao  /  Staff reporter

Acer Inc (宏碁) said yesterday it expected to have a flat performance in the third quarter compared with the second quarter, although it projected 5 percent to 10 percent growth in the fourth quarter from the current quarter because of Windows 8 product launches.

The company’s forecast came as it reported a disappointing net income of NT$56 million (US$18.65 million) in the second quarter, compared with NT$331.01 million in the first quarter because of paying a lump sum tax of NT$410 million in Europe, Acer said. However, that figure was compared with a net loss of NT$6.8 billion in the second quarter of last year.

Earnings per share were NT$0.02 in the second quarter, compared with NT$0.12 in the previous quarter and a loss per share of NT$2.57 a year earlier. Revenue last quarter was NT$110.55 billion, down 2.2 percent from NT$113.04 billion in the first quarter, but up 8.3 percent from NT$102.09 billion a year ago, the company’s data showed.

The revenue decline in the second quarter was against Acer’s original projection of 5 percent growth, which Acer president Jim Wong (翁建仁) attributed to macroeconomic environments and delay of the Windows 8 product launch announced in this year’s Computex trade show in June.

However, Wong said Acer had seen growth in Eastern Europe, Latin America and some countries in Asia, such as Indonesia and India. In the first half of the year, revenue totaled NT$223.58 billion, down 2.7 percent from NT$229.89 billion year-on-year, Acer said.

However, the company’s operating margin of 0.3 percent, net income of NT$387 million and earnings per share of NT$0.14 were better than the operating margin of minus-2.24 percent, a net loss of NT$5.6 billion and a net loss per share of NT$2.12 it reported in the same period last year.

Acer’s second-quarter performance was in line with JPMorgan’s prediction, which said it expected Acer to see modest revenue decline in the second quarter, with operating margins hovering at about zero percent to 0.5 percent. It also said a lack of scale and poor execution in China continued to hamper any recovery in margins.

However, Acer chairman and chief executive officer Wang Jeng-tang (王振堂) said yesterday that starting this month, Acer would begin to roll out new products, so the company would see growth this month and next.

“Acer’s organization and operation have been stabilized, so we have confidence to make our operation profitable,” Wang said. “Originally we were expecting high growth in the second half, but because of the global economic situation and uncertainty of the Windows ecosystem, the high growth may turn out to be only medium growth.”

Speaking of Microsoft Corp’s Windows 8, Wang said: “A lot of brand companies and channels have a cautious attitude, although everyone is preparing for the Windows 8 launch. We did not see the momentum for explosive growth accumulating, so we are still waiting for signals of consumer enthusiasm.”

With regards to Windows RT, Wong said the company did not give up on Windows RT, but would introduce it early next year.

Wong said the company expected Ultrabooks to account for 12 percent to 20 percent of its notebook shipments in the fourth quarter.

He also maintained the company’s target of shipping about 2 million units of tablets and this year.

Acer’s shares closed at NT$27.5, down 0.9 percent, in Taipei trade yesterday.

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