Asustek Computer Inc (華碩) yesterday forecast that its revenue would drop as much as 24.65 percent this quarter from last year, as the company has changed its sales strategy, cutting shipments of mid to low-end notebook computers to maintain its profitability amid rising cost pressures.
The company forecast that its revenue would drop to between NT$100 billion and NT$110 billion (US$3.14 billion and US$3.46 billion) this quarter, compared with last year’s NT$132.72 billion.
The forecast represents little or no growth in sales from last quarter’s NT$107.5 billion.
Asustek chief financial officer Nick Wu (吳長榮) said the decision was made in response to the increasing average selling prices of key notebook components, such as panels and DRAM, rather than because of market demand.
“The overall market demand for notebooks will remain stable this quarter,” Wu told reporters after an investors’ conference in Taipei.
Wu said Asustek is shifting its marketing resources from the unprofitable mid to low-end notebooks and concentrating on higher-end two-in-one detachable notebooks, its ZenBook series and gaming products.
Under the revised strategy, the company expects revenue from the PC segment to expand by 5 percent from last quarter, Wu said.
Growth momentum of the company’s mobile devices would be stronger than the PC business, driven by the growing demand for the ZenFone 3 series since the products debuted in late August, Wu said.
Revenue from the mobile devices segment would grow by between 10 and 20 percent quarter-on-quarter, Wu said.
The sales contribution from the segment could top 20 percent compared with last quarter’s 17 percent, he said.
Asustek chief executive officer Jerry Shen (沈振來) said the sales momentum of the ZenFone 3 series would extend into next quarter, as demand remains strong in Taiwan, Japan, Indonesia and Brazil.
Shen said Asustek plans to launch its next-generation ZenFone in the second quarter of next year to maintain the momentum of its smartphone business.
Asustek yesterday reported a better-than-expected net income of NT$5.97 billion for last quarter, beating the NT$5.58 billion consensus estimate of analysts.
That was 42 percent higher than last year’s NT$4.21 billion and 45 percent higher than the previous quarter’s NT$4.1 billion, company data showed.
Asustek attributed the growth to stable demand for notebooks and non-operating gains of NT$3.32 billion, which included NT$2.82 billion in dividend income and a foreign-exchange gain of NT$55 million.
However, gross margin fell 0.93 percentage points to 13.9 percent from last year’s 14.83 percent, due to the later launch of its latest ZenFone series compared with the previous year, Wu said.
Operating margin contracted by 0.33 percentage points from last year’s 4.33 percent to 4 percent last quarter, company data showed.
Asustek unveiled the ZenFone 3 series in the third quarter of this year, while the previous series was launched in the second quarter of last year.
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