Acer Inc (宏碁) yesterday said net profit surged to NT$485 million (US$16.13 million) last quarter as stringent expense control helped boost its operating profit margin to the highest level in years.
That was the second profitable quarter in a row for the world’s No. 4 PC vendor, indicating that chief executive officer Jason Chen’s (陳俊聖) turnaround efforts have made some progress.
Chen was hired in January to revive the struggling PC brand.
In the first quarter, Acer posted a net profit of NT$1.12 million after a historically high loss of NT$20.58 billion for last year blamed on poor product strategies.
Last quarter, operating profit margin improved to 0.81 percent, compared with 0.17 percent in the first quarter, Acer said.
Last quarter’s net income is slightly lower than the NT$486 million estimated by Fubon Securities Co (富邦證券) analyst Arthur Liao (廖顯毅).
Fubon Securities is the first brokerage to turn positive on Acer.
Liao gave an “add” rating on the stock, with a target price of NT$28, implying a more than 16 percent upside from Acer’s closing share price of NT$24.05 in Taipei trading yesterday.
“Acer is our top Asian PC brand, ahead of Asustek Computer Inc (華碩) and Lenovo Group (聯想),” Liao said, in expectation that Acer would regain its market position this year.
In the first six months of this year, Acer’s net profit grew 1.8-fold to NT$486 million, or NT$0.81 per share, compared with net profit of NT$171 million in the same period last year.
“The results further point to Acer’s positive direction,” Acer said in a company statement yesterday.
Acer said it is optimistic about its turnaround progress and expects the growth momentum to carry into the current quarter, backed by back-to-school PC demand.
Liao said Acer’s revenue is expected to grow as much as 15.56 percent to NT$94 billion in the current quarter, from NT$81.34 billion last quarter.
The company is expected to ship 5.4 million notebook computers, up 17 percent from 4.6 million units last quarter.
In a separate statement, Acer said its board of directors had approved chairman George Huang (黃少華) heading up a new global strategy office, in which he will focus on exploring business investment opportunities.
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