PC maker Acer Inc (宏碁) might remain profitable this year, but its growth momentum may stay slow and the firm could take a longer time for investors to become more optimistic toward the company’s business prospects, analysts said.
“We forecast Acer will maintain its profitability this year on improving notebook demand worldwide in the second half of this year,” a Yuanta Securities Investment Consulting Co (元大投顧) analyst, who declined to be named, said by telephone yesterday.
“However, this year’s performance is expected to be flat from last year,” the analyst said.
The world’s fourth-largest PC brand this week reported net profit of NT$1.79 billion (US$57.05 million), or earnings per share of NT$0.66, for last year, marking its first profitable year in three years, thanks to improved notebook shipments and a stabilized market share.
Acer’s notebook shipments are expected to decline 20 percent this quarter from last quarter due to sluggish demand in China and emerging markets, the Yuanta analyst said.
PC demand in emerging markets and China is predicted to pick up from May or June, while foreign currency fluctuations are also likely to stabilize by the end of the second quarter, which would help drive overall PC demand, the analyst said.
“Acer’s shipments could grow 15 percent to 20 percent next quarter from this quarter, because of a relatively low comparison base,” the analyst said.
UBS Securities Pte Ltd is also cautious about Acer’s outlook this year, citing worries about end demand for Acer’s products and its weak balance sheet.
Another risk is that Acer’s management does not provide a guidance and is not clear about its next growth catalyst, UBS analyst Arthur Hsieh (謝宗文) said in a note released on Thursday.
While Acer is likely to be more aggressive in the Chromebook business this year, the company does not have any “sustainable advantage” in the market, Hsieh said.
“Acer could be vulnerable to increasing competition in this market and its high exposure to emerging markets,” he wrote.
Fubon Securities Co (富邦證券) analyst Arthur Liao (廖顯毅) on Thursday said that Acer is expected to post another profit this year, but the company “needs to show progress in its cloud business to investors.”
Acer founder and former chairman Stan Shih (施振榮) has reiterated on several occasions that the company’s cloud-computing business will take off next year, making more of a contribution to Acer’s revenue.
Cloud computing is the right direction for Acer to invest, the Yuanta analyst said, but the firm might face fierce competition from other information technology firms.
“Given its relatively low net income, our biggest concern for Acer is that it might not have enough capital to invest in cloud computing compared with its peers,” the analyst said.
Acer shares declined 2.13 percent this week to close at NT$20.7 yesterday in Taipei trading. They have fallen 3.04 percent this year.
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