Acer Inc (宏碁) may post fewer earnings this year and next year due to a slower-than-expected recovery in the PC brand’s operating profit margin, Daiwa Securities Capital Markets said in a note recently.
The Japanese brokerage slashed its estimates for Acer’s earnings per share (EPS) this year by 54 percent to NT$0.69 (US$0.02) and for next year by 16 percent to NT$2.34, given Acer’s disappointing results for the second quarter of this year.
The cut in earnings also led to a revision by Daiwa of its six-month target price for Acer from NT$40 to NT$35, while the brokerage kept a “buy” rating on the stock.
WINDOWS 8 SOFTWARE
However, Daiwa expects robust sales of Acer’s new products in the fourth quarter of this year as consumers await new Windows products, which are set to lead to double-digit revenue growth over the previous quarter.
“Still, our expectation of continued growth in Acer’s market share is unchanged with the company focusing on the mainstream-PC market rather than tablets,” Daiwa analyst Christine Wang (王琦清) wrote in the note.
During the April-June quarter, Acer’s notebook computer shipments rose 1.2 percent from one quarter earlier to 7.57 million units, giving it a 15.4 percent share of the global market, the highest of any vendor in the world, research firm Gartner Inc said.
Also, the Taiwanese PC producer’s shipments to the European region gained 3.8 percent over the first quarter, making it the region’s largest notebook supplier with a 20 percent share, Gartner said.
Wang expects Acer’s revenue to turn positive on an annual basis in the fourth quarter and accelerate significantly from the first quarter of next year. Subsequently, she recommends purchasing the stock prior to the fourth quarter of this year.
MAJOR PC VENDOR
Acer, the world’s fourth-largest PC vendor, posted about NT$56 million in net profit, or NT$0.02 per share for the April-June period, down from NT$331 million or NT$0.12 per share recorded in the first quarter.
The company’s second-quarter EPS failed to meet the market expectation of NT$0.19 and British bank Barclays PLC’s forecast of NT$0.13.
Acer said it attributed its lower earnings in the global PC market in the second quarter to the fact it appeared weaker than the previous quarter, which affected buying in Europe, the US, China and other markets in the Asia-Pacific region.
However, it expects sales to recover this month and next month on the back of the launch of new PC models bundled with Microsoft Corp’s Windows 8 operating system.
Shares of Acer closed 0.90 percent lower, at NT$27.5, in Taipei on Friday.