Fri, Nov 15, 2013 - Page 13 News List

Quanta cuts shipments forecast

TABLETS IN, PCS OUT:To sustain long-term growth, the firm plans to expand its share of non-notebook markets, and it plans to ship 20 million tablets next year

By Helen Ku  /  Staff reporter

Quanta Computer Inc (廣達), the world’s top contract laptop maker, yesterday revised downward its annual tablet shipment forecast to 15 million units from an earlier forecast of 20 million units, citing an upsurge in “white-brand” mobile devices that has been eating into its clients’ share of the global tablet market.

“We were optimistic about the company’s tablet shipments this year and didn’t expect that our clients’ products would face pricing competition from Chinese white-brands,” Quanta vice chairman C.C. Leung (梁次震) told analysts during a conference call.

Currently, a majority of Quanta’s orders for tablets are for Inc’s Kindle Fire, and Google Inc and Asustek Computer Inc’s (華碩) co-branded Nexus 7.

To sustain long-term business growth in the contract PC market, Quanta will expand its share of non-notebook markets and it plans to ship 20 million tablets next year, he added.

As of the second quarter of the year, tablet and server products together accounted for 15 percent of Quanta’s total sales.

With increased shipments of lower-margin tablets, Quanta’s gross margin last quarter fell to 4.48 percent from 4.68 percent the previous quarter.

On an annual basis, third-quarter gross margin reflect a 0.4 percentage point improvement from 4.08 percent during the same period last year, mainly because the company’s raw material costs were better controlled, Quanta chief financial officer Elton Yang (楊俊烈) said.

Supported by increased laptop shipments, Quanta’s third-quarter net profit grew 15.7 percent to NT$4.65 billion from NT$4.02 billion the previous quarter. However, compared with NT$6.47 billion generated during the same period last year, last quarter’s net profits reflected a 28.1 percent annual decline.

Earnings per share during the July-to-September period were NT$1.21, up from NT$1.05 during the April-to-June period, but down from NT$1.69 during the same period last year, the company’s financial report showed.

As for traditional PCs, Quanta retained its annual forecast for laptop shipments of 44 million units and said it expects single-digit growth next year, thanks to the launch of new products by its clients.

Quanta chairman Barry Lam (林百里) said the company’s annual server shipments would also achieve “considerable growth” next year.

“Global cloud-based server shipment has been growing at a steady pace and it is likely that strong demand for cloud-based servers in the US and Europe will be the main driver of Quanta’s server shipments next year,” Lam said.

In terms of product mix, notebook and non-notebook products are forecast to account for 65 percent and 35 percent of Quanta’s total shipments next year, Leung said.

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