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.
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