Contract notebook computer maker Wistron Corp (緯創) yesterday posted a declining gross margin of 5.25 percent for last quarter, down 16.4 percentage points from the previous quarter’s 6.28 percent, citing higher labor costs in China.
“There have been some extreme cases where the costs of human resources [HR] in some areas almost doubled in the last quarter,” Wistron chief financial officer Henry Lin (林進財) told an investors’ conference call, citing increasing commissions for HR agents and wages for employees in the peak season.
As the company is preparing for the peak season, Wistron said it would need to spend more on recruitment to shore up its orders.
In the July-to-September quarter, Wistron reported a net income of NT$1.44 billion (US$47 million), or earnings per share of NT$.061, down 1.36 percent from last year’s NT$1.46 billion, but up 19 percent from the previous quarter’s NT$1.21 billion.
Quarterly revenue was NT$155.75 billion last quarter, down 2.59 percent year-on-year, but up 14.62 quarter-on-quarter, thanks to strong notebook shipments. Operating margin also dropped to 0.85 percent last quarter from the previous quarter’s 1.19 percent, higher than the 1.15 percent posted the previous year, the company said.
Lin said notebook shipments this quarter may drop 5 percent from last quarter as Wistron enters the traditional slow season, and the rest of its product shipments would be flat.
Wistron’s notebook shipments next year may total 21 million units and those of smart devices may reach 25 million units, up 67 percent from this year’s 15 million units, he said.
Meanwhile, Wistron’s board yesterday approved its subsidiary Wistron InfoComm Manufacturing Co Ltd’s (緯新資通崑山) proposal to spend a maximum amount of US$135 million on equipment and machinery.
Wistron’s consolidated revenues for the first 10 months of this year totaled NT$475.22 billion, down 9.75 percent from a year earlier.
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