Compal profits plunge 29% on lower shipments

FEWER NOTEBOOKS::The firm’s president did not give a second-quarter target for notebook shipments, but said strong tablet demand will boost quarterly sales

By Helen Ku  /  Staff reporter

Fri, May 10, 2013 - Page 13

Compal Electronics Inc (仁寶電腦), the world’s second-largest contract laptop maker, yesterday reported its first-quarter net profit dropped 29 percent year-on-year due to a decrease in notebook shipments.

Net profit fell to NT$1.36 billion (US$46.11 million) in the first three months, or earnings per share of NT$0.31, from NT$1.9 billion in the same period of last year, the company’s statement showed.

Foreign exchange losses amounted to NT$239 million in the first quarter, which the company attributed to a “misarrangement” of asset allocations.

Compal said it had reviewed and readjusted its investment portfolio, hoping to avoid foreign exchange losses this quarter.

“Global tablet shipments are growing faster than expected,” Compal president Ray Chen (陳瑞聰) said of the falling notebook shipments at an investors’ conference.

“While we expect Microsoft Corp’s participation in promoting Windows 8-powered PCs will help drive up growth in worldwide notebook shipments, we forecast global growth rate in Windows 8 notebooks will be less than that of tablets in the second half of the year,” Chen said.

Chen said Microsoft plans to launch new Windows 8-powered products in the third quarter of the year, while Compal’s clients Acer Inc (宏碁) and Asustek Computer Inc (華碩) are also scheduled to ship new series of Windows 8 all-in-one computers, laptops and tablets.

However, Compal’s total PC products are expected to contract by a low single-digit percentage this quarter from last quarter, Chen said.

Chen did not provide a target for notebook shipments for this quarter, saying only that he remains upbeat that the firm’s total tablet and notebook shipments could achieve double-digit growth this year, driven mostly by strong tablet demand.

Compal has set a shipment target of between 8 million and 10 million units for its tablet products, and will continue increasing their contribution to the company’s sales quarter by quarter, it said.

The company also aims to ship between 4 million and 5 million TVs this quarter, almost double that of the January-to-March period.

In a filing to the Taiwan Stock Exchange, Compal reported consolidated revenue of NT$57.12 billion for last month, down 11.8 percent month-on-month, but up 13.1 percent year-on-year.

In the first four months of the year, Compal’s accumulated revenue totaled NT$224.35 billion, up 5.7 percent from the NT$212.25 billion it generated during the same period of last year.

Compal has decided to distribute a cash dividend of NT$1 per common share on earnings made last year. Based on Compal’s share price of NT$19.1 yesterday, the yield rate is about 5.23 percent.