PC maker Asustek Computer Inc (華碩) yesterday reported net income of NT$4.5 billion (US$143.3 million) for the fourth quarter of last year, falling short of market expectations due to massive foreign exchange losses.
The figure represented a 22 percent decline from the previous quarter. On an annual basis, last quarter’s net income plunged 21 percent from a year earlier.
Asustek’s quarterly net income was lower than the NT$5.58 billion estimated by Daiwa Capital Markets Inc analyst Steven Tseng (曾緒良).
Asustek chief financial officer David Chang (張偉明) said the depreciation of the Russian ruble against the US dollar has caused a big impact on the firm’s profitability, which eroded gross margin by 1 percentage point to 12.6 percent last quarter.
“For last quarter alone, we booked NT$713 million in exchange losses,” Chang told an investors’ conference.
To minimize foreign exchange losses, Asustek chief executive officer Jerry Shen (沈振來) said Asustek is adopting several measures, including quoting orders in US dollars rather than local currencies in emerging markets.
Revenue this quarter is expected to grow by a single-digit percentage year-on-year, supported by growing shipments of smartphones, Chang said.
However, the revenue outlook beat Tseng’s forecast of a 1.65 percent annual contraction, as Tseng expected slow seasonal demand and a weakening euro to impact revenue. Europe is expected to contribure 30 to 35 percent to the PC brand’s revenue.
This quarter, shipments of PCs are expected to decline 11.11 percent sequentially to 5.6 million units from 6.3 million units, due to seasonally weak demand, Shen said.
Shipments of mobile devices, including tablets and handsets, are expected to fall 31.5 percent to 5 million units from 7.3 million units last quarter, he said.
Shen expects growth momentum to return next quarter on the back of growing demand and new product launches for notebooks and mobile devices.
This year as a whole, PC shipments are expected to increase 15 percent to 25.87 million units from last year’s 22.5 million units, driven by the new ZenBook series, the two-in-one Transformer Book Chi series and low-cost notebooks, Shen said.
“We expect to see strong growth from ZenBook and Chi starting next quarter,” he added.
Shen said the firm is optimistic that its smartphone business would turn a profit this year, with annual shipments expected to more than double to about 17 million units from last year’s 8.5 million units.
Shen said his optimism was based on growing demand from emerging markets and in Taiwan.
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