Quanta earnings fall on margin slide

RISING COSTS::Rival computer contract maker Compal Electronics last week also reported falling gross margins due to continued increases in key component costs

By Lisa Wang  /  Staff reporter

Tue, Mar 27, 2018 - Page 12

Quanta Computer Inc (廣達), Apple Inc’s main assembler for MacBooks and the Apple Watch, yesterday reported a 5.1 percent contraction in earnings last year as its gross margin continued to fall.

Gross margin fell for a fifth quarter in a row to 4.2 percent last quarter and averaged 4.47 percent for the full year, down 0.74 percentage points from 5.21 percent in 2016, company data showed.

The notebook computer maker, based in Linkou District (林口), New Taipei City, did not elaborate on what caused the gross margin decline.

However, its closest rival, Compal Electronics Inc (仁寶), last week said continuing increases in key components — especially passive components — had affected its margins.

Compal said it was in talks with more clients to raise prices as there were no clear signs that the increases in key component prices would subside any time soon.

Quanta’s net profit dropped to NT$14.37 billion (US$493 million) last year, from NT$15.14 billion in 2016, company data showed.

That translated into earnings per share (EPS) of NT$3.73 last year, down from NT$3.93 the previous year.

Operating margin shrank 0.42 percentage points to 1.72 percent last year from 2.14 percent.

Operating costs climbed about 15 percent to NT$975.53 billion last year, from NT$847.39 billion in 2016, a separate company statement with detailed financials submitted to the Taiwan Stock Exchange showed.

Quanta’s board of directors yesterday approved the distribution of a cash dividend of NT$3.4 per common share, the lowest since 2013.

That represented a payout ratio of 91 percent or a yield of 5.65 percent based on the stock’s closing price yesterday of NT$60.20.

Inventec Inc (英業達), an assembler of Apple Inc’s AirPods and HomePods, yesterday reported a net profit of NT$6.75 billion for last year, down 19.6 percent from NT$5.64 billion in 2016.

EPS dropped to NT$1.88 from NT$1.57.

Gross margin slid to 5.36 percent last year from 5.59 percent in 2016.

Inventec’s board of directors yesterday gave the green light to the distribution of a cash dividend of NT$0.5 per common share.

The board also approved the sale of a plant in Taoyuan as the company aims to revitalize its idled assets.

Inventec is scheduled to release detailed financial figures today.