Quanta Computer Inc (廣達電腦), the world’s biggest contract notebook computer maker, yesterday reported 57 percent annual growth in net profit in the second quarter, saying that it expects robust laptop demand to drive double-digit percentage growth in laptops shipped this year.
The company’s growth could be compromised by shortages of key components, the company said.
Net profit last quarter expanded to NT$6.25 billion (US$211.61 million) from NT$3.97 billion a year earlier. That represented quarterly growth of 142.4 percent from NT$2.58 billion. Earnings per share rose to NT$1.62, compared with NT$0.67 in the first quarter and NT$ 1.03 a year earlier.
Gross margin improved to 6.21 percent, compared with 4.85 percent in the first quarter and 4.77 percent a year earlier.
Quanta shipped 14.5 million laptop computers, a 99 percent increase from the first quarter and a 67 percent increase from a year earlier, benefiting from urgent demand for laptops, Quanta chief financial officer Elton Yang (楊俊烈) said.
“Shipping so much more product is creating economies of scale that let us lower costs,” Yang said, adding that non-laptop sales were also robust.
Laptop demand is likely to remain fierce until the end of this year, Yang said.
“We expect double-digit percentage growth [in laptops shipped] for the second half of 2020, compared with the first half,” Yang said. “We also expect double-digit percentage growth for the whole of 2020, compared with last year.”
“If we can resolve raw material shortages, we might even see a surprise upside,” he added.
Quanta chairman Barry Lam (林百里) told investors that he is optimistic that Quanta can maintain strong growth even after virus-related demand wanes.
“We were worried that we were just seeing a temporary surge, but the demand is getting stronger and stronger,” Lam said. “This confirms that the Otaku [“geek”] economy is here to stay. We cannot make our products fast enough to meet demand due to material shortages.”
Asked about the threat of China developing its own laptop production capability, Lam said that Quanta’s focus on design and innovation differentiates it from companies that simply provide original equipment manufacturing (OEM) services.
“We’ve never been just an OEM. We help our clients realize their ideas. We provide product innovation,” Lam said, adding that he is excited for the new range of product possibilities afforded by 5G technology.
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