Compal Electronics Inc (仁寶), the world’s second-biggest contract notebook computer maker, yesterday said that its net profit surged 50 percent quarter-on-quarter to NT$2.09 billion (US$65.73 million) last quarter, benefiting from a rebound in PC demand and rush orders for Chromebooks ahead of license fee hikes by Google’s parent company, Alphabet Inc.
That compared with first-quarter net profit of NT$1.39 billion. On an annual basis, net profit rose 4 percent from NT$2.02 billion.
Earnings per share rose to NT$0.48 last quarter from NT$0.32 in the first quarter and NT$0.46 in the second quarter last year.
Photo: Fang Wei-chieh, Taipei Times
Operating margin improved to 1.13 percent last quarter from 1.08 percent in the first quarter and 0.74 percent in the second quarter last year.
“We have received numerous rush orders during the second quarter,” Compal president Martin Wong (翁宗斌) told an online investors’ conference. “PC channel inventory has returned to normal levels.“
“We see recovery looming in the third and fourth quarters, aided by improving inflationary pressure and easing interest rate hikes by the US,” Wong said.
However, as customers have turned conservative about placing orders, Compal said there was caution about the outlook for the third and fourth quarters.
For this quarter, shipments of notebook computers should grow at a single-digit percentage from 8.7 million units last quarter due to a higher comparison base last quarter, Wong said.
For the whole year, notebook computer shipments would shrink between 10 and 15 percent compared with last year, he said.
However, Compal is optimistic about next year’s business, expecting the PC industry to embrace new replacement demand.
After holding back on spending for the past three years during the COVID-19 pandemic, corporations would be more willing to spend on PC and information system upgrades given an improving world economy, Wong said.
“The industry’s winter should be approaching its end this year,” he said. “We are more optimistic about next year and the year after.”
“Besides, the introduction of artificial intelligence [AI]-enabled notebook computers will help spur some demand,” he added.
Investors yesterday focused on Compal’s diversification to server business.
Compal is rapidly expanding into servers following in the steps of local rivals.
It expects revenue contribution from servers next year would rise from 2 or 3 percent this year.
“We have made some progress by gaining more customers from Europe this year,” Wong said. “Next year, we are expanding our reach to the US market.”
On top of that, shipments of AI-enabled servers are to increase significantly to make up 20 to 25 percent of the company’s total server shipments next year, from 8 percent this year, the firm said.
Compal is also broadening its business scope to include healthcare devices and automotive components.
It is targeting a boost in revenue contribution from the new business areas to 10 percent within three years from 5 percent this year, it said.
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