Quanta foresees 10% shipment growth

DIVERSIFIED::While the company’s forecast for its notebook shipments is at the high end of overall industry estimates, it is also pursuing growth in non-notebook businesses

By Amy Su  /  Staff Reporter

Wed, May 04, 2011 - Page 12

Quanta Computer Inc (廣達電腦), the world’s largest contract notebook computer maker, yesterday said its second-quarter notebook shipments could rise 10 percent from the first quarter and that full-year shipments could grow by 10 percent from the previous year.

The company’s net profits grew 7.1 percent from a year earlier to NT$5.71 billion (US$200.3 million), or NT$1.49 a share, in the first quarter, the company’s financial statement showed.

That figure compared with a median estimate of NT$4.6 billion compiled by a Bloomberg News survey of 10 analysts.

Quanta founder and vice chairman C.C. Leung (梁次震) told an investors’ conference that the company’s first-quarter notebook shipments of 13.1 million units was lower than the 14 million units in the fourth quarter of last year because of the seasonal lull.

“But we are confident that the company’s notebook shipments will grow by 10 percent sequentially in the second quarter, higher than the industry average,” Leung said

Improving shipments of notebooks in the following quarters could bring Quanta’s full-year unit growth to 10 percent from a year earlier, the high end of the notebook industry’s average growth forecast of 5 percent to 10 percent this year, Leung said.

First-quarter revenues fell 0.4 percent from a year earlier to NT$251.6 billion, while gross margin stood at 3.6 percent in the first quarter, up from 2.8 percent in the previous quarter, thanks to better cost controls and production efficiency, company officials said.

Leung said the company’s gross margin would keep improving in the second quarter, as the company could consider raising prices to reflect the rising costs.

“We expect the first-quarter gross margin to be the lowest this year,” Leung said.

Quanta chairman Barry Lam (林百里) said the company would focus more on the cloud computing business this year, anticipating the sector will grow and contribute more to the company’s sales and earnings in the coming years.

“The cloud computing business is ramping up, specifically on servers and tablets, with a diverse client base, and that is the major driver the company is pursuing,” Leung said.

The firm expects non-notebook businesses to account for 30 percent of sales by the end of this year, mainly driven by the cloud computing sector, Leung said.

Quanta did not provide guidance for tablet device shipments for this year. Company officials said tablets are basically customized products, with the focus more on design than on volume. The company began making tablets last year.

Quanta’s share price rose 2.23 percent to close at NT$57.8 yesterday. The company’s board of directors has approved a proposal to distribute a cash dividend of NT$3.6 per share, Taiwan Stock Exchange data showed.