Shares in Compal Electronics Inc (仁寶電腦) fell 3.21 percent yesterday after the world’s second-largest contract maker of notebooks reported its first-half profit plunged 47.73 percent from a year earlier.
The Taipei-based company’s share price closed at NT$25.6 in Taipei trading, declining 15.23 percent so far this year, underperforming the TAIEX, which has advanced 4.23 percent.
In a filing to the Taiwan Stock Exchange on Wednesday, Compal said its net income in the first six months of the year totaled NT$3.44 billion (US$114.7 million), compared with NT$6.58 billion in the same period of last year.
Earnings per share (EPS) were NT$0.79 in the first half, down from NT$1.55 a year earlier, while revenue rose 4.24 percent to NT$362.19 billion from NT$347.44 billion the year before.
In the second quarter alone, the company’s net income was NT$1.57 billion, down from NT$1.87 billion in the first quarter and lower than NT$3.28 billion a year earlier. EPS fell to NT$0.36 from NT$0.43 in the first quarter and compared with NT$0.75 the year before.
Compal did not elaborate on its revenue and earnings performance in the filing. The company is expected to release more details such as gross margin and operating margin during its quarterly conference with analysts today, where it is likely to provide sales guidance for this quarter and the second half.
However, Fubon Securities Investment Services Co (富邦投顧) analyst Arthur Liao (廖顯毅), who gave Compal a “reduce” rating, said the poor second-quarter results were mainly due to foreign exchange losses and higher taxes.
Liao said he did not expect Compal to fare well in the second half because of weaker notebook orders from two of its major clients, Dell Inc and Acer Inc (宏碁), as well as a lack of tablet and Apple Inc orders.
“From Pegatron (和碩) and Asustek’s (華碩) meetings with analysts, we got the impression that it will be difficult for ODMs [original design manufacturers] without tablet projects or Apple product lines to avoid a sales decline in the second half of 2012, and Compal is one such victim,” Liao wrote in a note yesterday.
Asustek Computer Inc on Wednesday reported better-than-expected results for the second quarter and raised its forecast for tablet shipments by 67 percent to 5 million units this year, while Pegatron Corp on Friday last week forecast a 15 to 20 percent sequential decline in its notebook shipments this quarter, although it expects Windows 8-equipped notebooks and tablets to drive up its sales in the fourth quarter.
Separately, Compal’s board of directors yesterday approved a proposal to acquire 300 million new shares issued by Henghao Technology Co (恆顥科技), a wholly owned subsidiary in the glass-type projected capacitive touch-panel business, helping the latter to increase its paid-in capital to NT$5.4 billion from NT$2.4 billion, according to the filing.
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