Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, yesterday said it expects operations to hit bottom this quarter and remained conservative about the rest of the year due to the slow season for sales of consumer electronics products and uncertainty over the global economy.
“We do not have good news for the first half of this year... Business in the second quarter is expected to hit the year’s trough,” Pegatron chief executive officer Jason Cheng (程建中) told a teleconference.
Given the traditional slow season for consumer electronics and product transition for major client’s handsets, Pegatron forecast revenue from its non-computing segment to contract by between 20 percent and 25 percent this quarter from the previous quarter.
Pegatron’s non-computing segment, which includes its iPhone assembling business, generated 87 percent of the company’s revenue of NT$256.38 billion (US$7.88 billion) in the first three months of this year.
Notebook shipments are expected to shrink by between 10 and 15 percent sequentially this quarter, before shipments pick up a quarter later on launches of new notebooks, Pegatron chief financial officer Charles Lin (林秋炭) said.
Shipments of motherboards and desktops are likely to decline by between 5 percent and 10 percent this quarter from the January-to-March quarter, Lin said.
Looking ahead, Cheng said Pegatron expects its performance in the second half to be better than the first half, supported by the upcoming launch of a next-generation smartphone.
However, Cheng remained conservative over the pace of the growth, saying the soft global economy might affect consumer demand.
Cheng said it would be challenging for total shipments to grow this year from last year in light of the high base.
The Pegatron executives’ remarks came after the firm reported weaker-than-expected earnings for last quarter.
Its net income plunged 35.1 percent year-on-year and 39.8 percent quarter-on-quarter to NT$4.1 billion, or earnings per share of NT$1.58, last quarter, missing the market’s consensus estimate of NT$4.91 billion net profit.
The quarterly result represented the lowest net profit in the past six quarters, according to the company’s filings.
Gross margin was 5.8 percent last quarter, down from last year’s 6.2 percent and slightly higher than 5.7 percent three months earlier.
Its operating margin fell annually and quarterly to 2.6 percent last quarter.
Sales for last month dropped 16.32 percent annually and 27.14 percent monthly to NT$65.1 billion last month, according to the stock filing.
Consolidated revenue totaled NT$321.59 billion between January and April this year, falling 8.64 percent from NT$352.02 billion in the same period last year, the filing said.
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