Quanta Computer Inc (廣達電腦), one of the world’s leading contract notebook computer makers, yesterday reported an 86.4 percent annual increase in net profit for the first quarter despite weak seasonality for technology products during the period.
The firm — an assembler of Apple Inc’s MacBooks — also manufactures non-notebook products such as automotive electronics and cloud-based solutions for global brands, and is ramping up production of artificial intelligence (AI) servers to meet growing demand.
Quanta said net profit for the first quarter rose to NT$12.07 billion (US$373.5 million) from NT$6.47 billion in the same period last year.
Photo courtesy of Quanta Computer Inc
On a quarterly basis, net profit increased 17.4 percent from NT$10.28 billion, the company said in an earnings report.
Earnings per share were NT$3.13, compared with NT$1.68 a year earlier and NT$2.67 the previous quarter, it said.
While the company’s revenue in the first quarter fell 2.7 percent year-on-year and 10.1 percent quarter-on-quarter to NT$258.94 billion due to seasonal weakness, its earnings beat market expectations and reached the highest first-quarter level ever thanks to a better product mix, especially AI-related products, and foreign exchange gains.
In addition, Quanta’s gross margin hit 8.48 percent and its operating margin climbed to 4.52 percent in the first three months, also new highs for the first quarter in the company’s history.
Yuanta Securities Investment Consulting Co (元大投顧) had estimated earnings per share of NT$2.6 and revenue of NT$251.85 billion, while forecasting gross margin of 8.02 percent and operating margin of 4.25 percent.
“We still expect the AI trend to be the firm’s main sales driver going forward, especially US cloud service providers’ strong AI server demand,” Yuanta said in a note ahead of the release of Quanta’s earnings data. “Additionally, Quanta is developing GB200 server projects, which should also drive shipments should client demand grow.”
The GB200 projects refer to AI servers powered by Nvidia Corp’s GB200 flagship chips.
With Quanta’s AI servers likely to show strong shipments from this month or next month on easing of AI GPU supply tightness, the firm’s server sales are forecast to grow more than 60 percent this year and expand another 40 percent next year, Yuanta said.
The notebook computer business accounted for up to 35 percent of the firm’s total revenue in the first quarter, while non-notebook computer business including automotive electronics and servers made up the remaining 65 percent.
Quanta shipped 10.5 million notebooks in the quarter, up 1 percent from the previous quarter and beating its earlier guidance of a sequential decline of 7 to 9 percent. Still, notebook shipments fell 2.8 percent from a year earlier, the firm said.
Quanta’s board of directors has proposed a cash dividend of NT$9 per share given the firm’s earnings per share of NT$10.29 last year, which represents a payout ratio of 87.5 percent.
The dividend distribution is subject to the final approval of shareholders at the company’s annual general meeting scheduled for June 14.
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