Quanta Computer Inc (廣達), which assembles MacBooks and smartwatches for Apple Inc, yesterday reported a gross margin of 5.08 percent for the first quarter, its best quarterly performance in five years, which it attributed to its product mix, lower operating costs and the strong performance of its cloud storage service.
“In the past quarter, we shipped fewer high-priced products and implemented effective cost management measures, which benefited margin performance,” Quanta chief financial officer Elton Yang (楊俊烈) said at a news conference at the company’s headquarters in New Taipei City’s Linkou District (林口).
With lower development costs for its clients’ new products, Quanta’s operating expenses last quarter dropped 19.64 percent to NT$3.72 billion (US$121.25 million) from the previous quarter’s NT$8.33 billion, the company said.
Following the launch of Apple Inc’s 12-inch MacBook and Apple Watch, the company might find it a challenging to maintain gross margin at above 5 percent this quarter, Quanta vice chairman C.C. Leung (梁次震) said
“On the other hand, we expect notebook shipments this quarter to rise 10 percent from last quarter, with consolidated revenue likely to increase more than 10 percent,” Leung said.
Quanta hopes to boost its wearable product shipments this quarter, Leung said.
Other Taiwanese firms in Apple’s supply chain, such as Hon Hai Precision Industry Co (鴻海精密), Wistron Corp (緯創) and Catcher Technology Co (可成科技), reportedly contributed workers to assist Quanta’s efforts to assemble Apple’s new products over the past few months.
Leung said the company would not experience severe labor shortages in China again for the remainder of this year after it faced a shortfall during the Lunar New Year holiday.
Leung said Quanta expects this quarter’s revenue to grow in tandem with increased Apple Watch shipments.
A Quanta official, who is familiar with the matter, but declined to be named, said Apple Watch shipments would be smoother going forward as long as one firm supplying a key component of the gadget could resolve its difficulties.
Quanta expects to see between 55 and 57 percent of its annual notebook shipments in the second half, citing relatively weak seasonal demand in the first half, Leung said, adding that for the whole year, notebook shipments are expected to be flat or decline by 5 percent from last year’s 4.85 million units.
“We maintain our forecast of revenue increasing quarter-by-quarter to reach NT$1 trillion by the end of the year,” Leung said.
Quanta’s profitability last quarter was affected by a foreign exchange loss of NT$152 million, causing net income to plunge 21.5 percent annually and 32.1 percent quarterly to NT$3.67 billion.
Earnings per share were NT$0.95 last quarter, down from NT$1.21 per share a year earlier and NT$1.14 per share the previous quarter.
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