Asustek Computer Inc (華碩), the world’s fourth-largest PC vendor, yesterday posted its smallest quarterly net profit for the past year after its tablet business drifted into losses due to gloomy demand.
Net profit dropped 8 percent to NT$4.16 billion (US$127.89 million) during the quarter ending March 31, compared with NT$4.54 billion in the previous quarter.
However, on an annual basis, net income climbed 13 percent from NT$3.68 billion.
As the slump in demand for tablets is expected to continue, Asustek forecast that its second-quarter revenue would contract by between 9 and 14 percent to between NT$95 billion and NT$100 billion, compared with last quarter’s NT$110.5 billion.
On an annual basis, Asustek still has a chance to hold its revenue steady in the second quarter.
The company made NT$99.37 billion in revenue in the same period last year.
“The [quarterly] downward pressure comes primarily from the tablet business, which is expected to drop by 30 percent or 40 percent annually by revenue,” chief financial executive Nick Wu (吳長榮) told an investors’ conference.
Wu expects a significant improvement in the company’s tablet business next quarter in terms of revenue and profitability, helped by new product launches.
The PC business, which accounted for 66 percent of the company’s revenue last quarter, is expected to be flat, or grow about 5 percent year-on-year in the current quarter, Asustek said.
“The company could still outpace the industry due to an improvement in average selling prices from rising contribution from gaming PCs and high-end ultra-thin notebook computers,” Wu said.
To fend off intensifying competition in the PC industry and explore a new growth engine, Asustek said it has tapped into new product areas such as virtual reality (VR) headsets, augmented reality (AR), robotics, as well as Internet of things (IoT) for smart homes, cars and wearables.
“Those non-PC products will gradually become the main growth drivers for the company,” Wu said.
The first VR headsets for mobile phones are due to hit the market next quarter, while VR headsets for PCs and AR headsets for mobile phones are to arrive at next year’s Consumer Electronics Show (CES) in Las Vegas, based on the firm’s timetable.
For the Computex Taipei trade show, which is to run from May 31 to June 4, Asustek plans to showcase its first service robotics, as well as new mobile phones, tablets and PCs before they hit store shelves in July.
Commenting on the appointment of Asustek’s cofounder Ted Hsu (徐世昌) as chief strategy officer, chief executive officer Jerry Shen (沈振來) said that Hsu would help the company speed up formation of new and accurate strategies.
However, Shen avoided an investor’s question about whether Hsu is to succeed Jonney Shih (施崇棠) as chairman in the foreseeable future.
Asustek expects gross margin this quarter to range from 12.5 to 13.1 percent, compared with 13.5 percent last quarter, Wu said.
Operating profit margin is likely to range between 4 and 4.5 percent, compared with 4.3 percent in the previous quarter, he added.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Taiwan has enough crude oil reserves for more than 100 days and sufficient natural gas reserves for more than 11 days, both above the regulatory safety requirement, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday, adding that the government would prioritize domestic price stability as conflicts in the Middle East continue. Overall, energy supply for this month is secure, and the government is continuing efforts to ensure sufficient supply for next month, Kung told reporters after meeting with representatives from business groups at the ministry in Taipei. The ministry has been holding daily cross-ministry meetings at the Executive Yuan to ensure
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
RSS