Tue, Nov 11, 2014 - Page 13 News List

Pegatron profit rises on product mix

THE RIGHT MIX:Aside from notebook computers, the company is counting on sales of smartphones and other non-computing products to drive revenues this quarter

By Lauly Li  /  Staff reporter

Contract notebook computer maker Pegatron Corp (和碩) yesterday reported a 68 percent annual growth in quarterly net profit for last quarter, citing an improved product mix and better yields.

For this quarter, the company expects faster growth from its non-computing segment, with revenue rising 40 to 50 percent sequentially, while its notebook shipments are expected to grow by 20 to 30 percent.

Net income surged to NT$6.17 billion (US$201.63 million) last quarter from NT$3.67 billion a year ago. It was also up 2.5 folds from NT$2.48 billion in the second quarter.

Gross margin rose to 6.4 percent last quarter, from 6.1 percent in the second quarter and 4.2 percent a year ago.

Consolidated revenue rose 11.5 percent to NT$236.7 billion last quarter from NT$212.35 billion in the previous quarter, but was down 6.8 percent from NT$253.97 billion a year ago.

“Last quarter’s revenue growth was mainly driven by new product launches in the communications segment, coupled with the seasonal effect in the consumer electronics segment,” Pegatron chief executive officer Jason Cheng (程建中) told an investors’ conference.

Revenue from the non-computing segment should continue to grow this quarter, Cheng said.

The communications segment contributed 45 percent to Pegatron’s total revenue last quarter, up 10 percent year-on-year and 29 percent quarter-on-quarter, thanks to higher smartphone volumes and a seasonal peak, Pegatron chief financial officer Charles Lin (林秋炭) said.

Due to weaker-than-expected notebook demand, revenue from the computing segment declined 30 percent year-on-year, while that from consumer electronics declined 18 percent, as tablet demand is slowing down after a two-year boom, Cheng said.

For the current quarter, Pegatron expects notebook shipments to increase, but desktops and motherboards would be flat or drop by up to 5 percent, Chang said, citing overall weak demand in the industry.

“We will do our best to maintain profitability in the computing segment this quarter and next year to keep our competitiveness,” Cheng told reporters.

He did not deny the possibility that revenue in the computing segment could continue to decline next year.

As to capital expenditure, Cheng said the company has maintained a conservative policy over the past two years, but it is considering budgeting NT$300 million next year to boost capacity and equipment purchases for product design manufacturing services.

Pegatron reported revenue of NT$120.02 billion for last month, up 36.51 percent from a year ago and 13.24 percent from the previous month.

In the first 10 months of this year, consolidated revenues totaled NT$786.79 billion, up 1.95 percent from a year earlier.

Pegatron shares surged 3.47 percent to NT$56.70 in Taipei trading yesterday, outperforming the TAIEX, which gained 1.54 percent.

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