Elitegroup Computer System Co (精英電腦) yesterday drastically revised downward this year's financial forecasts, citing poorer-than-expected sales, overdue accounts receivable and a loss caused by falling inventory prices.
Elitegroup amended its pre-tax profits for this year to minus NT$644.8 million from original estimates of NT$598.9 million made on April 26, according to the company's announcement on the Mar-ket Observation Post System set up by the Taiwan Stock Exchange Corp.
Forecasted revenue was reduced to NT$20.5 billion from the original NT$20.9 billion, according to the notice.
"The large-scale downward revision was to reflect the less-than-expected shipments of motherboard and notebook products in the first half of this year and our perception of a dull second half ahead as well as other estimated losses," said spokesman Tsai Chia-hung (蔡佳宏).
Elitegroup, which shipped 8 million motherboards in the first half, has accordingly cut the targeted shipment for this year to 17.5 million motherboards from the previous estimate of 20 million.
The company, which shipped 200,000 laptops between January and June, retained the primarily conservative estimates of 600,000 units for this year, "as we were not bullish about the sector in the first place," Tsai said.
The adoption of more strictly defined accounts receivable of the company itself and the overseas affiliates made the overdue receivables jump by NT$250 million to between NT$300 million and NT$400 million, the company said.
The launch of new platforms by Intel Corp for both motherboard and notebook products caused pressure for price cuts to get rid of stocks of last-generation products, Tsai said.
The sale of its production base in Kunshan, China, due to a decrease in laptop shipments after its manufacturing teams were set for orders from Apple Computer that were instead vended to Asustek Computer (華碩電腦), may add another NT$150 billion worth of losses for the company this year, Tsai said.
Nevertheless, the firm's drastic move did not happen out of the blue, analysts said.
"Elitegroup has been in a less-than-ideal condition for a long while," said Steven Tseng (曾緒良), chief analyst on downstream electronics at Yuanta Core Pacific Securities (元大京華證券).
Elitegroup's notebook business has been weak since its orders from Apple were acquired by Asustek last year, Tseng said.
Its core motherboard business has also been under pressure since Asustek made inroads into the segment under the brand of ASRock (
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