Contract notebook computer maker Pegatron Corp (和碩) yesterday reported weaker-than-
expected net profit for last quarter due to foreign-exchange losses, but its profit margins beat analysts’ forecasts because of a better product mix.
As the company’s sales continued to fall last month amid a product transition among major clients, Pegatron said shipments of notebook computers for this quarter would decline by between 5 and 10 percent from last quarter and those of motherboards and desktop computers would see a sequential fall of up to 5 percent.
However, shipments of non-information technology products are to forecast increase by between 20 and 30 percent on a quarterly basis, the company said in a presentation document released on the company’s Web site following its quarterly earnings conference.
“Overall, sales in the second half would likely grow by at least 20 percent from the first half,” the Chinese-language Apple Daily’s online news site yesterday quoted Pegatron chief financial officer Charles Lin (林秋炭) as saying.
Pegatron, which also assembles Apple Inc’s iPhone and iPad Mini products, saw consolidated revenue for the first half edge up 0.3 percent to NT$431.09 billion (US$14.34 billion) from NT$429.82 billion in the same period last year.
Lin reiterated the company’s guidance that full-year sales split would be 45-55 for the first half and the second half.
Net profit for the April-to-June quarter fell 45.2 percent sequentially to NT$1.498 billion, but was 7.5 percent higher than a year earlier.
Earnings per share were NT$0.65 last quarter, compared with NT$1.18 in the first quarter and NT$0.61 for the same period last year.
Gross margin improved to 6.1 percent last quarter from 5.2 percent the previous quarter and 4.5 percent a year earlier, while operating margin increased to 2.7 percent from 2.3 percent and 1.3 percent respectively, the presentation document showed.
Before the company’s release of its second-quarter results, UBS Securities Pte Ltd forecast that Pegatron would report a net income of NT$1.8 billion for the second quarter, with gross margin of 4.8 percent and operating margin of 1.9 percent. Market consensus forecast was a net income of NT$2 billion, with gross margin of 4.9 percent and operating margin of 1.9 percent.
“The recovery in gross margin was mainly supported by the company’s product mix adjustments and operational efficiency enhancement,” Lin said.
He said that the slight decline in net profit last quarter was due to foreign-exchange factors and a European convertible bond-related charge on accounting issues.
Revenue last quarter fell to NT$212.35 billion on a consolidated basis, the lowest since the second quarter of last year, when the company reported NT$212.23 billion.
Pegatron attributed the decline to lower shipments of information technology and consumer electronics products, although communication product shipments remained steady last quarter.
Last quarter, Pegatron posted lower notebook computer shipments of 2.6 million units, down 5.6 percent quarter-on-quarter and 33.8 percent year-on-year.
The company also reported that sales last month dropped 6.69 percent from June and 1.67 percent from a year earlier to NT$67.3 billion, bringing its cumulative revenue for the first seven months to NT$495.68 billion, down 0.5 percent year-on-year, company data showed.
Pegatron shares rose 2.11 percent to NT$58 yesterday in Taipei trading. The stock has increased 51.04 percent so far this year.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to