Wed, May 15, 2013 - Page 13 News List

Quanta profit hits nine-quarter low

LIGHT AHEAD:The laptop maker is counting on cloud-computing servers and tablets to lift sales and earnings in the second half of the year, company executives said

By Helen Ku  /  Staff reporter

Quanta Computer Inc (廣達), the world’s top contract laptop maker, yesterday saw its earnings fall to the lowest level in nine quarters last quarter, but forecast its bottom line would improve in the second half of the year.

Net profit was NT$4.45 billion (US$148.8 million), or NT$1.16 per share, in the first quarter, down 13.2 percent year-on-year and 18.7 percent quarter-on-quarter.

“We expect to see the company’s earnings achieve healthy growth in the second half of the year after we start shipments of our clients’ new products,” Barry Lam (林百里) told a press conference.

Lam said Quanta’s ability to mass produce and design cloud-computing servers would help drive the company’s sales during the July-to-December period.

Quanta has been diversifying its product portfolio since 2009 as it searches for new sales drivers other than notebooks.

“Quanta will be aggressively seeking new business opportunities to expand its market share while catching up with new trends in PC markets,” Quanta chief financial officer Elton Yang (楊俊烈) told reporters on the sidelines of the conference.

The company aims to increase its server shipments, especially those related to “cloud computing solutions,” to enhance its gross margin, Yang said.

In the first quarter, servers made up about 35 percent of the company’s total sales, which is still relatively small compared with notebooks’ 65 percent, Yang said.

This year, Quanta is seeking to increase tablet shipments by 33 percent to 20 million units from 15 million units last year, Yang said, adding that the firm was also exploring the 4G long-term evolution (LTE) dongles market and plans to ship the products to US and Japan telecom companies next year.

Quanta’s sales for this quarter are expected to remain flat at NT$197.52 billion, ahead of the launch of new notebooks and tablets by clients next month, Yang said.

First Securities Investment Trust Co (第一金投信) analyst Rick Yu (俞瑞華) yesterday forecast Quanta would continue to suffer from declining notebook shipments this year, as cloud-computing servers are not easy to develop and its peers, Pegatron Corp (和碩) and Inventec Corp (英業達), have already grabbed a dominant share of the market.

Quanta plans to distribute NT$4 in cash dividend per share this year. Based on Quanta’s share price of NT$60.6, that implies a yield of 6.6 percent.

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