Asustek Computer Inc (華碩) yesterday posted a 59.39 percent year-on-year drop in net profit to NT$888 million (US$29.69 million) for last quarter, weighed down by heavy foreign exchange losses of NT$1.91 billion and losses of NT$517 million from its mobile phone business.
Losses from wholly owned subsidiary Askey Computer Corp (亞旭), which saw shipments fall amid component shortages caused by the outbreak of COVID-19, created extra pains for the firm, it said.
Overall, it reported earnings per share of NT$1.2 for the first quarter, its lowest since the first quarter of last year.
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“We faced the largest black swan event, COVID-19, last quarter,” Asustek chief operating officer S.Y. Hsu (許先越) told an online earnings conference.
However, the company improved its operational efficiency and saw gross margin increase by 4.9 percentage points from a year earlier to 16.4 percent.
Revenue contracted by 23.3 percent year-on-year to NT$64.04 billion.
With production interrupted in the middle of the quarter, Asustek’s PC shipments contributed 62 percent of overall sales last quarter, down from 70 percent in the same period last year.
Noting a rebound in market demand induced by lockdowns across the globe, Hsu said shipments had picked up significantly by the end of March.
“Distance-learning and telecommuting are the two biggest factors boosting market demand right now. With retail channels still low on inventory, we have gained quite a few new clients,” Hsu said.
The firm saw an increase in orders of more than 100 percent for its commercial PCs.
PC shipments are expected to increase 30 percent sequentially this quarter, but component shipments would likely decrease 10 percent from last quarter, it said.
After launching a range of laptops based on Intel Corp’s 10th-generation core central processing units, Asustek plans to launch new laptops in the second half of this year powered by Intel’s upcoming 11th-generation chips.
These would include a new lineup to bolster its content creation business segment, which has seen steady growth over the past quarters, the company said.
In an effort to turn its loss-making mobile phone business around within three years, Asustek is scheduled to launch the ROG Phone III — its next-generation gaming smartphone — by the third quarter, it said.
Wistron
In related news, Wistron Corp (緯創), a major original design manufacturer of laptops and servers, yesterday posted net profit of NT$726.71 million for last quarter, down 26.58 percent year-on-year, with earnings per share falling from NT$0.35 to NT$0.26.
Revenue contracted 15.73 percent on an annual basis to NT$173.77 billion due to declining shipments of laptops and desktops.
The company shipped 3.55 million laptops, 2.5 million desktops and 460,000 servers in the quarter, it said.
Wistron, which is also an assembler of Apple Inc’s iPhones, said that it is expanding production capacity in India, where it has three manufacturing facilities.
Earlier this year the company more than doubled its Indian investments from US$36 million to US$76 million, and yesterday its board of directors approved a further increase in capital expenditure from US$76 million to US$165.3 million.
The board also approved increased investment in the company’s plant in Kunshan, China, from US$68.05 million to US$79.54 million, which would go toward equipment purchases.
Wistron is also investing heavily in Vietnam where it aims to relocate part of its China-based PC and monitor production. The Vietnamese plant is set to start shipments by the end of next year, the company has said.
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