Citigroup bearish on notebook shipments for the first quarter

Staff writer, with CNA

Mon, Mar 17, 2014 - Page 14

Citigroup Inc said that notebook computer shipments from Taiwan-based major original design manufacturers (ODMs) will fall more than expected in the first quarter of the year, following a weak February.

ODM notebook shipments in this quarter are forecast to decline 15.5 percent from the previous quarter, to reach 32.35 million units, underperforming by an average 10 percent drop over past years, the US bank said in a recent note to investors.

This follows a 9 percent monthly decline in last month’s shipments reported by the top five ODM notebook makers, including Quanta Computer Inc (廣達電腦), Compal Electronics Inc (仁寶電腦), Wistron Corp (緯創), Pegatron Corp (和碩) and Inventec Corp (英業達), according to Citigroup.

“We believe that some bullish investors’ expectations of a better seasonal quarter will now be disappointed, given the weak February shipment results,” Taipei-based Citigroup analyst Wei Chen (陳思維) said.

“The weaker February notebook shipment and sub-seasonal first-quarter forecast supports our view that the structural bottoming of the PC industry has yet to be seen,” he said in the research note.

Hong Kong-based brokerage CLSA Ltd forecast an 18 percent to 19 percent quarterly drop for ODM notebook shipments in the first quarter of the year, despite a rebounding this month that is expected to see a 15 percent to 20 percent increase from last month.

Last month, global PC shipments from brand companies suffered a 10 percent decline, their worst showing in history, though some analysts say the industry has reached its lowest point.

“Although PC shipments continued to decline in the worldwide market in the fourth quarter [of 2013], we increasingly believe markets, such as the US, have bottomed out as the adjustment to the installed base slows,” Gartner Inc principal analyst Mikako Kitagawa said.