Wed, Nov 11, 2015 - Page 13 News List

Inventec reports solid 3Q earnings

By Lauly Li  /  Staff reporter

Inventec Corp (英業達) yesterday reported better-than-expected net income for last quarter, driven by strong demand for handheld devices and its solar power products.

The company’s net income was NT$1.94 billion (US$59.05 million) last quarter, up 6.59 percent from last year’s NT$1.82 billion and 65.81 percent from NT$1.17 billion made in the prior quarter.

The figures indicate Inventec’s most profitable quarter in the past 10 quarters, according to the firm’s filing with the Taiwan Stock Exchange.

“The NT$105.42 billion sales income last quarter was the peak of this year and we hope this quarter would produce similar numbers,” Inventec chief financial officer Yu Chin-pao (游進寶) told an investor conference in the firm’s headquarters in Taipei.

Yu said that the company would do its best to maintain the performance of its core business this quarter, but there are some non-operating factors, such as swings in foreign exchange rates, which might affect the company’s profitability this quarter.

Inventec president Huang Kuo-chun (黃國鈞) said the firm’s notebook business, which amounted to 49.9 percent of the firm’s total revenues last quarter, may benefit from the steady demand for commercial notebooks but the outlook is still unclear at the moment.

The company's notebook shipments rose 31 percent from the second quarter to 5.25 million units but its sales only increased by 16 percent to NT$105.4 billion, which analysts attributed to the impact of lower unit prices.

That partly explained why the company's gross margin fell from 5.6 percent in the second quarter to 5.3 percent last quarter, with operating profit of NT$1.36 billion that missed market expectation, Yuanta Securities Investment Consulting Co (元大投顧) analyst Calvin Wei (魏建發) said.

Inventec's server segment that accounted for 35 percent of the company’s sales is to be flat from last quarter, he added.

The mobile devices segment, which includes Xiaomi Inc’s (小米) smartphone assembling business, is expected to climb from last quarter due to the client’s increasing demand, said David Ho (何代水), chief executive of Inventec’s handset subsidiary, Inventec Appliance Corp (英華達).

This year, overall profitability and sales of the mobile devices segment appear better than last year, Ho said, citing the company’s efforts in adopting industrial automation.

Inventec expects handset shipments next year to grow to 50 million units from this year's 40 million units, Ho said.

Sales next year will also be driven by higher shipments for wearable products and smart home devices, he said.

This story has been updated since it was first published.

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