PC vendor Asustek Computer Inc (華碩) yesterday reported a 681 percent surge in net profit for the first quarter, driven by an overdue payment from an Indian cloud service provider and rising PC and artificial intelligence (AI) server shipments.
The company’s net profit rose to NT$12.79 billion (US$419.96 million), compared with NT$1.64 billion in the previous quarter.
On an annual basis, net profit grew 135 percent.
Photo: Ritchie B. Tongo, EPA-EFE
The Indian customer had delayed payment totaling NT$5.35 billion since March, which had been retrieved by the end of the first quarter, Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference.
First-quarter revenue reached NT$135.19 billion, down 4 percent from the previous quarter, but up 18 percent from a year earlier on the back of growing shipments of PC and AI servers, Wu said.
Earnings per share rose to NT$17.2, up from NT$2.2 in the previous quarter and NT$7.3 a year earlier.
The company’s operating margin exceeded its guidance of 4 to 5 percent, rising to 8.5 percent last quarter, from 0.7 percent the previous quarter and 4.1 percent in the first quarter last year.
Excluding bad debts retrieved, the operating margin would stay healthy at about 4.5 percent, Wu said.
Gross margin reached 15.5 percent, down 0.5 percentage points from the previous quarter, but up 0.6 points year-on-year, supported by a higher contribution from the company’s gaming product line, he said.
A sharp appreciation of the New Taiwan dollar could pressure profits over the next three to six months, but in the long term, the declining US dollar would benefit the company’s operations, Wu said.
Asustek expects PC revenue to grow 25 to 30 percent sequentially this quarter, while that of components, primarily motherboards and servers, is expected to rise 10 percent, as it has already seen purchases ahead of high US tariffs, the company said.
“The whole [PC] industry, including gaming and edge AI sectors, is developing toward the positive side, so the adoption and expansion of our product lines are still increasing,” Asustek co-CEO Samson Hu (胡書賓) said.
To cope with potential US tariff uncertainty, Asustek began stockpiling three to six months of PC and notebook inventory in the fourth quarter last year and has implemented a flexible pricing strategy with its sales channels to reflect rising operating costs, Hu said.
The US market accounted for less than 15 percent of Asustek’s total revenue, compared with 47 percent and 31 percent for Asia and Europe respectively, he said.
While US tariffs have somewhat affected the PC market, Asustek remains confident in growing its shipments and market share this year to outperform the industry, he said.
The company’s leading positions in gaming PCs, graphics cards and motherboards, along with its exchange rate hedging strategy, would help bolster its ability to cope with market fluctuations, he added.
Asustek expects its server business, which contributed a double-digit percentage of total revenue last quarter, to make up about 15 percent of revenue this year, unchanged from its forecast last quarter.
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