Contract notebook computer maker Compal Electronics Inc (仁寶) yesterday reported that its gross margin increased to 5.2 percent in the first quarter this year, the best in nearly 15 years, thanks to better product mix and less dependency on the low-margin electronics manufacturing businesses.
With growing contributions from non-PC products such as mobile phones, wearable devices and servers, along with declining exposure to low-margin products and efficient optimization of operations, the company has seen gross margin return above the 5 percent level in the past four quarters.
Non-PC products — which also include automotive electronics, 5G applications, medical and industrial products — accounted for 30 percent of the company’s first-quarter revenue of NT$199.1 billion, compared with 23 percent the previous quarter and 28 percent a year earlier, Compal’s financial statement showed.
Photo: Fang Wei-chieh, Taipei Times
First-quarter revenue was flat from a year earlier, but down 13.07 percent from the previous quarter due to weak seasonality.
However, because of the company’s investment in new businesses, and the increase in its research-and-development expenses, which boosted operating expenses and drove operating profit in the quarter to fall 4.65 percent year-on-year to NT$2.71 billion (US$89.5 million), the statement said.
Nonetheless, operating margin was flat at 1.4 percent, it said.
Benefiting from foreign exchange and investment gains, the company’s net profit during the January-to-March quarter reached NT$2.19 billion, up 15.86 percent from the same period a year ago, with earnings per share (EPS) rising to NT$0.5 from NT$0.43, the statement said.
Separately, Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, yesterday reported net profit in the first quarter increased 32.1 percent year-on-year to NT$4.3 billion, which it attributed to non-operating gains of NT$4.18 billion in the quarter.
Last quarter’s net profit translated into earnings per share of NT$1.62, the highest since the fourth quarter of 2023, compared with NT$1.22 a year earlier.
First-quarter revenue was NT$272.43 billion, up 8.8 percent year-on-year, the company said.
Gross margin decreased to 3.7 percent from 4.2 percent and operating margin also sank to 0.9 percent from 1.2 percent a year earlier, it said.
Apart from handsets, Pegatron manufactures notebook and desktop computers, wearable devices and game consoles, with major clients including Apple, Sony Corp, Microsoft Corp and Asustek Computer Inc (華碩).
Last quarter, communications devices accounted for 64 percent of the company’s revenue, followed by computing products at 11 percent and consumer electronics at 6 percent, it said.
The company expects shipments of notebook computers this quarter to increase by a “low-teen percentage point” from last quarter due to clients’ front-loading demand, and communications devices are expected to report weaker sales due to seasonal factors, while consumer electronics are forecast to see sales rise slightly, it said.
Pegatron begins shipments of server-related products in small volume this quarter and looks to see the volume increase next quarter, but it remains unclear about the order growth in the second half of the year, it said.
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
Nintendo Co hopes to match the runaway success of the Switch when its leveled-up new console hits shelves on Thursday, with strong early sales expected despite the gadget’s high price. Featuring a bigger screen and more processing power, the Switch 2 is an upgrade to its predecessor, which has sold 152 million units since launching in 2017 — making it the third-best-selling video game console of all time. However, despite buzz among fans and robust demand for pre-orders, headwinds for Nintendo include uncertainty over US trade tariffs and whether enough people are willing to shell out. The Switch 2 “is priced relatively high”
RSS