Acer tipping strong rise in sales

SMOOTH SUPPLIES: Chairman Wang Jeng-tang yesterday reassured investors of the company's smooth component delivery while competitors are facing bottlenecks


Sat, Oct 28, 2006 - Page 12

Acer Inc, the world's fourth-largest personal computer maker, is expecting a strong rise in sales in the next two quarters fueled by the release of Microsoft Corp's new operating system.

"Orders are rushing in for Acer products and revenues will rise 20 percent this quarter over the third," company president Gianfranco Lanci told an investors' conference yesterday.

Sales in the first quarter next year are expected to rise 10 percent to 15 percent over the first quarter this year, he said.

The company's rosy prospects emerged after it saw net profit drop 5.9 percent to NT$1.85 billion (US$55.7 million), or NT$0.81 per share in the last quarter, compared to NT$1.97 billion, or NT$0.86 a share, in the same period last year.

Sales rose 15 percent to NT$94.7 billion, while gross margin inched up to 10 percent from 9.9 percent a year ago, the company said in a Taiwan Stock Exchange filing.

Company chairman Wang Jeng-tang (王振堂) yesterday reassured investors of the company's smooth component delivery, even as many of its peers are faced with tight component supplies, especially after recent recalls of Sony batteries.

Acer has "no issues in batteries supplies" and has secured 95 percent of supplies for processors, panels and memory for the current quarter, Wang said.

The company reiterated at its 30th anniversary celebrations on Wednesday that it aims to overtake Lenovo Group Ltd (聯想) as the world's No. 3 PC maker next year.

To reach this goal, Acer will continue to push its desktop business, which currently supplies only 3 percent of the global market.

Following other computer makers' moves to diversify product lines, Acer is slated to launch its first smartphone by year's end.

The smartphone is aimed at individuals as well as small and medium-sized businesses that "want Blackberry features but can't afford the high monthly rates," Wang said.

But an analyst was skeptical that Acer would be able to live up to its expectations next year.

"It will be a challenge for Acer to outpace the industry's growth," said Sean Ryan (蕭文良), an analyst with Fubon Securities Investment Services Co (富邦證券投顧).

A number of research firms have forecast that worldwide notebook shipments will expand by 20 percent next year, weaker than the 30 percent growth in sales Acer is projecting.

Surpassing Lenovo is also not an easy task as the Chinese maker has established a solid position in the desktop market, whereas Acer is still in a push to grow in the segment, Ryan said.

But Citigroup said in a report yesterday that after a weak first half of the year in Europe, the Middle East and Africa, Acer's strong sales in the third quarter will continue into the current quarter.

Citigroup, which reissued a "buy" rating on Acer in the report, said that its current-quarter sales should be able to exceed 20 percent, driven by strong shipments in Europe.