Thu, Nov 14, 2013 - Page 13 News List

Asustek Q3 profit drops 26% on taxes

BETTER TIMES AHEAD?The company said its priority was to make its smartphones turn a profit by shipping 5 million units next year, from about 1 million units this year

By Helen Ku  /  Staff reporter

Asustek Computer Inc (華碩), the world’s fifth-largest PC brand, yesterday reported that its third-quarter net profit dropped 26 percent year-on-year due to one-time tax expenses amounting to NT$1.52 billion (US$51.37 million).

Net profit last quarter grew 4 percent to NT$4.94 billion from NT$4.76 billion the previous quarter, driven by increased shipments of new tablet and notebook products, Asustek said.

However, because of increased tax expenditures, its third-quarter profit declined by a double-digit percentage from NT$6.71 billion a year ago, according to the company’s financial report.

Earnings per share (EPS) during the July-to-September period were NT$6.65, compared with NT$6.3 in the previous quarter and NT$8.92 in the same period last year.

Asustek chief executive officer Jerry Shen (沈振來) told an investors’ conference that the company plans to launch new smartphones during the Consumer Electronics Show (CES) in Las Vegas in January and new Chromebook products sometime next quarter as the traditional PC market keeps contracting.

“We remain optimistic about the desktop and laptop market, but our priority is to make the company’s smartphone business turn a profit next year,” Asustek chief financial officer David Chang (張偉明) said.

With more retail stores in China and cooperation with more tier-one telecom operators globally, Asustek aims to grow its smartphone business from about 1 million units this year to 5 million units next year, Shen said.

As for the company’s new Chromebooks, Asustek has targeted students and teachers as potential consumers for its two new models, which are tentatively priced at US$199 for a 11.6-inch model and US$249 for a 13.3-inch version.

In addition, Asustek also plans to launch wearable devices during next year’s Computex tech fair in Taipei, Shen said, without elaborating.

Currently, laptops remain Asustek’s largest source of sales with a 57 percent contribution to the company’s product portfolio, followed by tablets with a 20 percent share and motherboards with a 13 percent share.

For this quarter, Asustek forecast its laptop shipments would grow 8.88 percent to 4.9 million units from last quarter, while tablet shipments would increase 2.85 percent to 3.6 million units and motherboard shipments would drop 3.63 percent to 5.3 million units.

The company forecast an operating margin of 4 or 5 percent this quarter, compared with 4.5 percent last quarter, and it expected the figure to remain above 4 percent next year.

Looking ahead, Asustek expected notebook shipments to grow 15 percent to 21 million units for the whole of next year and tablet shipments to rise by 7 percent to 13 million units if it gets orders for Google Inc’s third-generation Nexus 7 tablet.

“We are still in talks [about the Nexus 7 orders],” Shen said.

“Our long-term competitor is China’s Lenovo Group (聯想), and we will try hard to strengthen our presence in the Chinese market to secure the company’s business,” Chang said.

Shares of Asustek closed down 1.76 percent at NT$223 yesterday.

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