Acer forecasts shipment growth in Q2 (update)

2013/05/08 19:57:04

Acer Chairman and CEO J.T. Wang (right) and Corporate President Jim Wong

Taipei, May 8 (CNA) Taiwanese computer maker Acer Inc. said Wednesday that it is aiming for single-digit growth in shipments in the current quarter after returning to profitability in the first quarter.

Acer Corporate President Jim Wong told an investor conference that he expects shipments of Acer's notebooks, netbooks and tablets to remain flat or increase by up to 5 percent in the second quarter.

The company said its total PC shipments fell 11 percent sequentially in the first quarter, but it did not disclose the actual number of units shipped.

According to data compiled by research firm International Data Corp. (IDC), Acer shipments plunged 31.3 percent year-on-year to 6.15 million units in the first quarter, well below the industry's average of a 13.9 percent decline.

Wong said touch-enabled notebooks are expected to account for about 25 percent of Acer's total notebook shipments in the second quarter, and that the ratio is likely to hit 30 to 35 percent by the end of the year.

J.T. Wang, Acer's chairman and chief executive officer, said his company plans to break even in the second quarter, when the shipping quantity of its touch notebooks is expected to double those shipped in the first quarter.

He said Acer will continue to make more efforts in customer-centric designs and marketing to help the company regain growth momentum in the next decade.

"Our approach is to focus on driving valuable growth that is profitable and enhances Acer brand value," Wang said.

The company's operating margin in the quarter was 0.03 percent, and it had consolidated revenue of NT$91.7 billion (US$3.08 billion), down 9.4 percent from the previous quarter due to seasonal factors.

The company's first quarter net income was NT$515 million, or NT$0.19 per share, derived mainly from non-operating income such as foreign exchange gains and the disposal of stock.

Acer's operating income was NT$29 million, compared with an operating loss of NT$3.37 billion in the fourth quarter of last year that included a NT$3.5 billion intangible asset impairment charge for the loss in value of its rights to four trademarks.

Acer unveiled a series of Windows 8-based laptops and tablets in New York on May 3 in a bid to boost shipments and strengthen its bottom line, but the company is still struggling to cope with weak PC demand and strong competition from other brands.

Kirk Yang, a Hong Kong-based analyst at British banking group Barclays Plc, said Acer's operating margin of 0.03 percent was much lower than his forecast of 0.18 percent and a consensus estimate of 0.17 percent by Bloomberg.

"We expect Acer to guide revenue to grow by single digits sequentially, after posting quarter-on-quarter revenue contraction for five quarters in a row," Yang said in a note to clients before the investor meeting.

"However, we estimate that Acer's operating margin in the second quarter of 2013 will not see any meaningful recovery due to weakening global PC demand and more low-priced tablet PC shipments in the mix," he wrote.

Barclays forecast that Acer's sales revenue will grow 4.8 percent for the whole of 2013, with its operating margin improved to 0.8 percent. It maintained an "equal-weight" rating and a target price of NT$24 on the stock.

Acer shares closed up 2.26 percent at NT$24.85 before the announcement of the quarterly results.

(By Jeffrey Wu)
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