Leading industrial PC maker Advantech Co (研華) is cautiously optimistic about its business outlook this year, as economic headwinds remain in the near term, the firm said yesterday, after last quarter posting its weakest earnings per share in eight quarters.
Advantech, the first regional industrial PC vendor dedicated to smart cities and the Internet of Things, reported net profit of NT$2.29 billion (US$72.5 million) in last year’s fourth quarter, down 9.58 percent from a year earlier and 10 percent lower than the previous quarter.
Earnings per share were NT$2.67 last quarter, the lowest since the fourth quarter of 2021, when the company earned NT$2.94 per share.
Photo: CNA
Fourth-quarter revenue was NT$15.14 billion, down 12 percent year-on-year and 0.85 percent quarter-on-quarter, the firm said.
However, its gross margin increased last quarter to 41.1 percent, up 2.3 percentage points from a year earlier and 1 percentage point higher than the previous quarter, it added.
The company expects this quarter’s revenue to total US$440 million to US$460 million — or NT$13.8 billion to NT$14.4 billion in New Taiwan dollar terms — and it forecasts gross margin to be within the range of 39 percent to 41 percent, Advantech said in a statement after an earnings conference.
While the firm’s book-to-bill ratio has shown signs of a gradual recovery in the first two months of the year at 1.01, compared with 0.9 in the fourth quarter of last year, after regional markets have bottomed out, visibility in the industry remains unclear in the near term, Advantech chief financial officer and president of general management Eric Chen (陳清熙) said.
The company’s operations would fare relatively well in the second half of the year compared with the first half, which would see revenue decline year-on-year amid weak global demand, Chen added.
Based on the company’s current order visibility, sales in South Korea, Taiwan and Latin America would be relatively good, compared with the US and Europe, which together account for about 50 percent of its total revenue, Chen said.
The company maintains a neutral-to-optimistic view about demand prospects in China, he added.
Overall, Advantech’s cumulative net profit last year edged up 1 percent year-on-year to NT$10.84 billion, or earnings per share of NT$12.65, while total revenue fell 6 percent to NT$64.57 billion. The firm’s gross margin rose 2.5 percentage points to 40.5 percent.
By region, sales to North Asia last year outperformed other markets with 1 percent growth, while Taiwan's market performed the worst with sales falling 22 percent, the company said.
Shipments to emerging markets dropped 20 percent and sales in China fell 19 percent, while those in North America and Europe were down by 6 percent and 4 percent respectively, it said.
Advantech's board of directors has approved a proposal to distribute a cash dividend of NT$9.5 per share, it said.
The proposed cash dividend, if approved by shareholders on May 30, would represent a payout ratio of 75.1 percent as the company aims to maintain a high payout policy, it added.
The 6 percent decrease in revenue last year marked the largest fall in Advantech’s history, which reflected not just weakness in external demand, but also a deficiency in the firm’s business model, Advantech chairman K.C. Liu (劉克振) said.
The company’s operations in Taiwan mainly focus on designing and its Chinese operations are on manufacturing, but it sells products — mostly hardware products — to other overseas markets, Liu said, adding that Advantech needs to update its business model and prepare for the era of artificial intelligence of things.
In addition, the company would seek ways to bolster its long-term added value by 2030, including mergers and acquisitions, he added.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS