Sat, Nov 10, 2012 - Page 13 News List

Pegatron expects double growth of electronics revenue

BY Helen Ku  /  Staff reporter

Contract notebook and electronics maker Pegatron Corp (和碩) yesterday said it expected to see more than double growth in revenue of consumer electronics this quarter, despite a decline of between 20 percent and 25 percent in revenue of communication products.

The forecast came as the company reported record-high reveneu for its design manufacturing services (DMS) NT$192 billion (US$6.62 billion) in the third quarter, up 2.1 percent from NT$188 billion in the previous quarter and a 23.08 increase compared to the same quarter of last year.

“The growth was driven mainly by better-than-expected demand for communication products as well as seasonal effects in consumer electronics products,” Pegatron chief financial officer Charles Lin (林秋炭) said.

Sales of communication products grew substantially by 22 percent month-on-month and 123 percent year-on-year due mainly to increasing demand and better utilization, he said.

Lin said revenue in the computing segment dropped by 10 percent quarter-on-quarter, which contributed to less than 50 percent of total DMS revenue for the first time ever, mainly due to weak demand ahead of the launch of Windows 8 and the end of production of low cost notebooks.

Sales of computing products accounted for 48 percent of Pegatron’s DMS revenue last quarter, followed by 38 percent in communication products, and 14 percent in consumer electronics.

During the July-to-September quarter, Pegatron reported a net profit of NT$1.35 billion, up 64.6 percent quarter-on-quarter and 269.7 percent year-on-year.

Earnings per share were NT$0.6 in the third quarter and NT$1.53 in the first three quarters, the company’s financial report showed.

Consolidated revenue increased to NT$223.04 billion last quarter, up 1.7 percent from NT$219.22 billion in the previous quarter and 21.9 percent from NT$182.93 in the same quarter of last year, with a flat gross margin of 4.9 percent and an operating margin of 1.3 percent, down from the previous quarter’s 1.4 percent.

Looking ahead, Pegatron chief executive Jason Cheng (程建中) said he forecast notebook, motherboard and desktop shipments might remain flat at single-digit growth this quarter.

“However, we expect to see shipments of consumer electronics, such as game consoles, tablet computers and LCD TVs, to grow from 5 million to 10 million in the fourth quarter, raising DMS revenue to hit the target of NT$20 billion and annual EPS [earnings per share] of NT$1,” Cheng said.

Last month, Pegatron posted NT$61.75 billion in consolidated revenue, down 9.55 percent month-on-month, but up 44.37 percent year-on-year, with its cumulative revenue in the first 10 months totaling NT$488.58 billion, up 65.69 percent from the year before.

One of Pegatron’s domestic rivals, Compal Electronics Inc (仁寶電腦), yesterday reported consolidated revenue of NT$60.19 billion for last month, with a month-on-month decrease of 6.7 percent and year-on-year growth of 1.2 percent.

Compal said accumulated revenue for this year was NT$558.66 billion, down 3.6 percent compared with NT$579.73 in the same period of last year.

“Compared to the third quarter, we forecast a 5 percent growth in notebook shipments this quarter. Shipments might grow or remain flat this quarter, depending on the market’s demand,” Compal spokesman Gary Lu (呂清雄) said.

Meanwhile, Inventec Corp (英業達) posted unconsolidated revenue of NT$28.6 billion last month, up 6.68 percent month-on-month, but down 12.20 percent year-on-year, with cumulative revenue in the first 10 months reaching NT$262.06 billion, down 7.59 percent from a year earlier.

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