Industrial computer maker Advantech Co (研華) yesterday said its third-quarter revenue would be lower than the second quarter, as the company expects continued appreciation of the New Taiwan dollar against the US dollar, although growth momentum remains strong.
Based on an estimated exchange rate of NT$29.1 against the US dollar, the company said revenue in the third quarter would be between US$555 million and US$575 million, compared with NT$17.84 billion (US$594.9 million) the previous quarter.
The sales guidance came after the company reported its net profit in the second quarter decreased 6 percent to NT$1.99 billion from NT$2.1 billion a year earlier. Earnings per share dropped to NT$2.30 from NT$2.46, it said.
Photo: Fang Wei-chieh, Taipei Times
Gross margin in the second quarter fell 0.5 percentage points both annually and quarterly to 40 percent, as the NT dollar’s appreciation shaved 0.1 to 0.2 percentage points off the company’s gross margin, Advantech chief financial officer Eric Chen (陳清熙) told an earnings conference in Taipei.
The restructuring of Retail Technology Group Inc, a US-based unit fully owned by Advantech’s French point-of-sale subsidiary, trimmed gross margin by another 0.3 percentage points in the quarter, he said.
The company did not specify its foreign exchange losses in the second quarter, but said it posted non-operating losses of NT$630 million.
The book-to-bill ratio in the second quarter was 1.08, with regional breakdowns of 1.19 in the US, 1.03 in Europe and 1.08 in China, Chen said.
A ratio of 1.08 means that US$108 of orders were received for every US$100 of product billed during the quarter.
Revenue in the first half totaled NT$35.18 billion, up 23 percent year-on-year, and the company expects second-half revenue to account for 51 percent of full-year sales.
The company expects third-quarter revenue from North America to grow by a double-digit percentage year-on-year, driven by stronger sales of medical and audio-video equipment, while revenue from Europe is also projected to rise on the back of semiconductor and automotive-related orders, Chen said.
Revenue from China is expected to grow by a high-single-digit percentage, driven by stronger shipments of automated inspection equipment, he said.
Although US President Donald Trump last week announced a 20 percent tariff on Taiwanese goods, set to take effect today, the impact on most of Advantech’s products would depend on the outcome of the ongoing Section 232 investigation under the US Trade Expansion Act of 1962, Chen said.
The company expects continued tariff-related uncertainty in the second half, but plans to pass most of the costs on to clients, while negotiating cost-sharing with a few, he said.
Clients have not adjusted their US expansion plans amid tariff uncertainties, the company said.
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