Contract laptop maker Quanta Computer Inc (廣達電腦) yesterday posted a 17.4 year-on-year decline in net profit for last quarter to NT$2.58 billion (US$86.15 million) due to delayed production amid a COVID-19 outbreak in China.
Earnings per share decreased to NT$0.67, the lowest in nine years.
First-quarter revenue dropped 14 percent on an annual basis to NT$190.29 billion, while gross margin shrank by 0.12 percentage points to 4.85 percent due to a less-profitable product mix, Quanta chief financial officer Elton Yang (楊俊烈) told investors in a teleconference.
While the company last quarter shipped 7.3 million laptops due to strong orders in March, flat from the same period a year earlier, a significant portion of its shipments were made up of Chromebooks, which have a lower average selling price and margin, Yang said.
Laptop sales brought in about 45 percent of Quanta’s overall revenue last quarter.
“Market demand for Chromebooks erupted, as people are working and studying from home,” Yang said, adding that the momentum is likely to sustain this quarter.
“We do not expect things to fall back to their previous pattern after the COVID-19 pandemic... Some people would still continue to study and work remotely,” Quanta vice chairman and president C.C. Leung (梁次震) said.
While Quanta is still facing component shortages due to supply chain disruptions in Southeast Asia, laptop shipments this quarter are forecast to increase by a double-digit percentage on a quarterly basis.
Total laptop shipments in the first half of this year are expected to post double-digit growth on an annual basis, the company said.
Seeking to diversify its product lines with an ever-stronger focus on servers, Quanta said that it is seeking to ramp up production at its plants in Taiwan and Thailand.
In a bid to avoid US tariffs amid a trade dispute between the US and China, the company last year shifted part of its US-bound server production to New Taipei City’s Linkou District (林口), and set up a manufacturing facility for smart devices and other products enabling Internet of Things applications in Thailand’s Chonburi Province.
“We are still expanding production in Taiwan,” Leung said. “Production in Thailand has passed the learning curve and has the same capabilities as our plant in China.”
The company is still seeking opportunities to relocate more of its production from China to Southeast Asia in the near term, he said.
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