Asustek Computer Inc (華碩), the world’s No. 5 PC brand, yesterday said it expected revenues to drop 5 to 10 percent in the fourth quarter from the third quarter, in wake of flooding in Thailand, which has impacted production of hard disk drives.
The company joined its bigger domestic rival, Acer Inc (宏碁), which last week also predicted a revenue drop within a similar range for the fourth quarter, given the severe floods that have wreaked havoc in Thailand — which produces nearly half of the world’s hard drives.
“If we take out the flooding factor, fourth-quarter revenue may remain flat from the third,” Asustek chief executive Jerry Shen (沈振來) told investors.
To maintain profitability, the company will join Acer in raising average sales prices and downgrade hardware of selected notebooks starting in the fourth quarter to reflect the price hike of hard drives, he said.
The company expected an average of a 3 to 6 percent price increase for notebooks industry-wise because of the hard drive shortage.
Asustek posted revenues of NT$102.04 billion (US$3.4 billion) in the third quarter, up 24 percent year-on-year and a 42 percent quarter-on-quarter jump.
The figure was a record after the company split its manufacturing arm from its brand-name business in July last year. The rise was attributed to strong growth in shipments in Eastern Europe and the Asia-Pacific, especially China, it said.
Earnings were NT$4.68 billion, or NT$6.22 per share, up 11 percent from last year and a rise of 30 percent from the second quarter.
The company aims to ship 4.1 million notebooks, 1.2 million netbooks, 600,000 tablets and 6 million motherboards in the fourth quarter.
It shipped 4.3 million notebooks, 1.3 million netbooks, 800,000 tablets and 6.3 million motherboards for the third quarter.
The company expects emerging markets, which currently contributes 62 percent to total sales compared with 38 percent for mature markets, to drive growth next year.
The emerging markets include China, Brazil and India.
New products that will drive growth include the Padfone — a smartphone-tablet combo — to be unveiled in February next year and a second model of its popular tablet, the Transformer, this month.
Despite Asustek’s efforts to boost its PC presence, Cheng Kai-ming (鄭開明), an analyst with Horizon Securities (宏遠證券), does not expect Asustek to see any changes in its PC ranking next year.
“The competition is tough as the top four vendors are very strong. Unless Acer continues to lose market share, Asustek’s ranking next year will be little changed even if one or two models of its products manage to stand out,” Cheng said.
Shares of Asustek yesterday closed down 3 percent to NT$210.5 on the Taiwan Stock Exchange before the investors’ conference.
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