Contract notebook computer maker Wistron Corp’s (緯創) shares plummeted 9.21 percent to an 11-year low of NT$14.3 in Taipei trading yesterday, after reporting a worse-than-expected earnings for last quarter citing higher employee bonus expenses.
Wistron’s net profit stood at NT$77 million (US$2.38 million), or NT$0.03 per share, last quarter, plunging 93.64 percent from NT$1.21 billion in the second quarter last year.
The figure represented a quarterly decline of 89.5 percent from NT$733.73 million.
The quarterly result missed the market’s consensus estimate of NT$775 million and marked the company’s lowest quarterly net income since the third quarter of 2004.
“Wistron’s profitability was dragged by additional spending of NT$350 million on employee bonuses, lower operating scale and capacity utilization with weak PC momentum,” company investor relations official Joyce Chou (周文玲) said by telephone.
In addition, continuous model transition in smart devices caused Wistron to have a higher operating expense of NT$6.82 billion last quarter, a surge of 9.78 percent from last quarter, she said.
These factors led to a low operating income of NT$19 million last quarter, compared with last year’s NT$1.62 billion and NT$816.53 million in the previous quarter, Chou said.
Gross margin fell to 4.68 percent last quarter from 6.28 percent the previous year, but it was slightly higher than last quarter’s 4.66 percent.
Looking ahead, Wistron said it expects notebook shipments, which accounted for 47 percent of the firm’s revenues of NT$146.07 billion last quarter, to grow month-by-month this quarter to reach a double-digit percentage growth from last quarter’s 4.6 million units.
Shipments of smart devices, which contributed about 11 percent of last quarter’s sales, are expected to be flat or slightly down from last quarter’s 2.2 million units, while shipments of desktops may be flat or increase slightly from the previous quarter’s 3.2 million units, the company said.
Daiwa Capital Markets Inc said Wistron’s quarterly net income was worse than expected adding that it is worried about the company’s mobile business progress, citing the firm’s low production utilization rate last quarter.
“We are now more concerned about Wistron’s mobile business, as very limited order allocation from its major smartphone client could remain a big concern for its production capacity utilization and its profitability this quarter,” Daiwa analyst Steven Tseng (曾緒良) said in a note released on Thursday.
Tseng said low factory utilization suggests that Wistron’s progress in the smartphone business was a disappointment to the market and he expects shipment volumes to drop this quarter due to its slow progress in gaining shares in the supply chain of Apple Inc iPhones.
Tseng said he forecasts Wistron’s sales to grow 5 percent to NT$153.6 billion this quarter from a quarter earlier, down from his previous estimate of 19.12 percent growth, citing soft demand in the notebook and mobile segments.
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