Wistron Corp (緯創), a leading Taiwanese computer and peripheral original design manufacturer (ODM), posted its third quarter financial results yesterday, which were in line with forecasts.
Going forward, the company expects a gross margin of around 5.7 percent for next year, the company said via a teleconference yesterday.
Shipment projections for next year are 25 million notebooks, 1.7 million servers, 2 million voice-over-Internet-protocol (VOIP) devices and 10 million monitors, Simon Lin (林憲銘) chairman and chief executive officer at Wistron told analysts yesterday.
“Of the 25 million notebooks, we expect between 15 percent and 20 percent of the contribution to come from netbooks,” Lin said. “This is higher than my previous forecast of 10 percent. Despite the recent popularity of netbooks, I don’t see netbooks dominating the notebook business in the long term.”
His view was based on the fact that, depending on the materials and components used, notebooks could be competitively priced as well.
Lin cautioned on a “flattish” fourth quarter, but re-affirmed the company’s full year notebook shipment target of 21 million units.
Henry Lin (林進財), Wistron’s chief financial officer, re-affirmed the notebook maker’s strong relationship with its top five customers such as Hewlett-Packard Co, Acer Inc (宏碁) and Lenovo Group Ltd (聯想).
“More than 80 percent to 90 percent of our orders come from these top five firms, hence risk to accounts receivables is extremely low,” he said.
Lin also described the company’s sound financial situation, dispelling rumors of balance sheet problems.
He said that the 49 percent debt-to-equity ratio in the third quarter was an anomaly because of the acquisition of Lite-On Technology Corp (光寶科技) last month, and that by year end he expects the ratio to drop to between 17 percent and 25 percent.
On the issue of access to capital, Henry Lin assured analysts that Wistron is still a first-tier customer to many commercial banks, despite increased funding costs.
“With the spread going from the previous 30 basis points to 50 to 70 basis points, funding from international banks is still cheaper than many other markets,” he said.
Wistron’s third quarter revenue was NT$121.68 billion (US$3.66 billion), operating income was NT$2.46 billion and profit after tax was NT$2.2 billion, resulting in an earnings per share (EPS) of NT$1.47, the company reported yesterday. The figures include a NT$392 million payout in employee bonuses.
Year-on-year, third quarter revenue increased more than 60 percent, while net income grew 25 percent. Quarter-on-quarter, revenue, operating income and profit after taxes increased by 32.14 percent, 26.89 percent and 53.90 percent, respectively, the company said.
The company attributed growth primarily to enlarged business scale, better operations and expense controls, as well as a favorable foreign exchange trend.
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