Wistron Corp (緯創), the world’s third-biggest contract notebook manufacturer, said yesterday that while it expected margin to remain flat this quarter, it should improve in the fourth quarter as customers launch new products.
The company reported a gross margin of 4.95 percent in the second quarter, compared with 4.4 percent in the first quarter, which chairman Simon Lin (林憲銘) attributed to a better product mix.
Lin told investors the company’s performance in the third quarter would likely be flat mainly because notebook shipments, which are expected to account for about 60 percent of overall revenue this year, would be lower than it had earlier forecast.
“The growth momentum usually seen during high season in October might not occur this year,” Lin said.
The company reported a net income of NT$1.46 billion (US$48.66 million) last quarter, down 21.6 percent from NT$1.87 billion in the first quarter and 41.3 percent from NT$2.49 billion a year ago.
Operating income was NT$2 billion last quarter, contracting 10.61 percent quarter-on-quarter from NT$2.23 billion and 29.28 percent year-on-year from NT$2.82 billion.
Earnings per share last quarter reached NT$0.63, down 30 percent from NT$0.9 in the first quarter and 50 percent from NT$1.26 a year ago.
In the second quarter, revenue was NT$158.87 billion, representing a drop of 10.23 percent from NT$176.97 billion in the first quarter and 0.36 percent from NT$159.45 billion a year ago.
During the April-to-June period, notebooks accounted for 65 percent of total sales, while tablets accounted for 3 percent, desktops 9 percent, handheld devices 6 percent and LCD TVs 4 percent.
The company left its notebook shipment target unchanged at a range between 33 million units and 35 million units for this year, adding that it would reach the lower end of the target range despite the slowing global economy.
The LCD TV business remains a money-losing venture so far. However, Lin said he expected the TV business to turn a profit in the fourth quarter. The company shipped 4.5 million LCD TVs last quarter, rather than 5 million units it earlier predicted.
Lin yesterday gave a slightly upbeat outlook for the fourth quarter.
“In the fourth quarter, we will see more shipments of tablets, notebooks, handheld devices and flat [displays] for desktops and TVs. It will be slightly up in general compared with this quarter,” he said, without giving exact numbers.
In search of a driving force for future growth, Lin said the company has invested in education relating to cloud computing, content and client devices.
The company is currently working on a project involving 50 schools in Greater Kaohsiung, adding that it would adopt the same model for its operations in China, he said.
“We are testing the waters in Kaohsiung. It is new to us, but we have high hopes in the area,” he said, without elaborating.
Separately, the company said yesterday its board had also approved an additional capital injection of 19 million euros (US$23.8 million) in Polymer Vision BV for flexible display technology.
This story has been updated since it was first published.