Shares of Wistron Corp (緯創) yesterday plunged 3.36 percent to close at NT$27.30 in Taipei trading, reflecting investors’ disappointment with the company’s weaker-than-expected earnings performance for last quarter.
The closing price fell below Wistron’s 30-day moving average of NT$28.75, with 22.84 million shares changing hands, Taiwan Stock Exchange data showed.
Wistron, one of Apple Inc’s iPhone assemblers, on Friday reported net profit of NT$545 million (US$18.07 million), or NT$0.22 per share, for last quarter.
That represented a 62.4 percent drop from the previous quarter’s NT$1.45 billion, but was up 42.4 percent from NT$383 million in the same period last year, company data showed.
Despite the annual growth in earnings, Wistron’s gross margin dropped to a historic low of below 4 percent last quarter. It contracted by 1.91 percentage points annually and 0.51 percentage points quarterly to 3.78 percent.
Operating margin also dipped to its lowest level in seven quarters at 0.29 percent, down 0.84 percentage points annually and 0.78 percentage points quarterly.
Wistron attributed the weak margin performance to the New Taiwan dollar’s appreciation against the US dollar and increasing shipments of lower-margin smart devices last quarter.
“The product mix and a stronger NT dollar had a negative impact on Wistron’s margin during the January-to-March quarter,” a Wistron investor relations official said by telephone.
Despite the pressure on margin from a rising currency, Wistron booked foreign-exchange gains of NT$444 million due to its hedging strategy, the official said.
Analysts said the NT$444 million exchange gains suggested that Wistron’s core businesses only contributed NT$101 million to the net income of NT$545 million last quarter.
“That reflected the weak profitability of Wistron’s core businesses, including notebook computers, servers and smartphones, last quarter,” an analyst who declined to be named said by telephone.
Wistron expects its notebook shipments to climb by a single-digit percentage this quarter from last quarter’s 4.5 million units, the official said.
Server shipments are also expected to rise by a single-digit percentage from last quarter’s 480,000 units, the official added.
The company reported revenue of NT$59.34 billion for last month, which surged by 33.52 percent from last year’s NT$44.44 billion.
Revenue in the first four months of the year expanded 27.13 percent annually to NT$227.75 billion, its filing with the Taiwan Stock Exchange showed.
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