Sat, Mar 09, 2013 - Page 13 News List

D-Link profit falls on weak demand and competition

NETWORKING:The firm is planning to introduce more portable routers and ‘cloud’ cameras to meet demand from users of handheld devices

By Helen Ku  /  Staff reporter

Networking equipment manufacturer D-Link Corp (友訊科技) yesterday said net income fell 17.7 percent to NT$804 million (US$27.12 million) last year because of currency devaluation in emerging markets and weak demand in Europe.

Earnings per share were NT$1.23 last year, down 19.1 percent from NT$1.52 in 2011.

The disappointing results were also due to competition in China, where more router makers and telecoms carriers are joining the business to profit from increasing demand for cloud-computing technologies, the company said.

In the October-to-December quarter, net income declined 6.8 percent quarter-on-quarter to NT$272 million because of higher taxes, D-Link chief financial officer Ralio Sung (宋瑞耀) told an investors’ conference.

The figure was up 20.4 percent year-on-year, he said.

Revenue was NT$32.47 billion last year, down 0.1 percent from NT$32.51 billion in 2011, with fourth-quarter revenue falling 2.5 percent quarter-on-quarter to NT$8.16 billion, Sung said.

D-Link expects to see quarterly sales growth starting next quarter, as it is confident new products, which the company launched in the second half of last year will drive its sales momentum this year, he added.

The company is undergoing a corporate restructuring to adapt to the dynamic PC market.

“The network communications industry has changed dramatically over the past decade,” D-Link chief executive Chen Jui-hsu (陳睿緒) said. “As long as human societies continue developing, the network communications industry will continue to exist.”

The company is also planning to roll out more portable routers and “cloud cameras” this year to meet diverse networking demand from users of handheld devices, he said.

Cloud cameras, portable for home or business surveillance, currently account for 5 percent of the firm’s sales.

Chen forecast that sales of cloud-computing-oriented routers and surveillance products would make up between 10 and 20 percent of quarterly sales growth this year.

D-Link is also betting on wireless routers and is preparing to introduce the product if HTC Corp’s (宏達電) HTC One and Samsung Electronics Co’s Galaxy S4 smartphones receive positive feedback, he added.

In a filing submitted to the Taiwan Stock Exchange yesterday, D-Link said its accumulated revenue in the first two months of the year dropped 12.09 percent year-on-year to NT$4.6 billion from NT$5.24 billion.

For this quarter, the company said it expects sales to decline quarter-on-quarter, with gross margin remaining flat at 30 percent.

For the whole year, sales are expected to see single-digit percentage growth, it said.

The company plans to hold a shareholders’ meeting on June 14 to approve a proposal to distribute a cash dividend of NT$1 on earnings made last year.

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