Computer vendor Asustek Computer Inc (華碩) yesterday said it aims to return to the black this quarter after its inventory reduced to a stable level, and it narrowed quarterly losses last quarter amid a fragile pickup in consumer demand.
The projection is better than its estimates two months ago. Asustek told investors in March that operating margin would drift into negative territory in the first two quarters of this year.
As the company reduced its inventory to a manageable level last quarter, Asustek said that there is a high likelihood that its bottom line would reach a break-even point this quarter, earlier than expected.
Photo: Fang Wei-chieh, Taipei Times
The company’s inventory dropped 40 percent year-on-year to NT$115.85 billion (US$3.77 billion), it said.
Asustek plans to maintain inventory at a similar level this quarter, as it is preparing for a peak in seasonal demand in the second half of this year, it said.
The company posted about NT$900 million in reversal of inventory write-downs during the January-March period, reflecting the company’s strong inventory management, it said.
“The industry’s overall inventory has improved and is approaching a healthy level, with channel stockpile dropping to pre-COVID-19 pandemic levels,” Asustek chief executive officer Samson Hu (胡書賓) told an investors’ conference yesterday.
“Inventory is not a crucial problem. Market demand is our focus,” Hu said. “During the second quarter, we are seeing demand creep up. Supply chains remain conservative about pulling products.”
PC shipments are to expand 20 percent sequentially during this quarter, supported by recovering demand from consumer models and gaming computers, Asustek said.
Entering the sector’s peak season next quarter, the company expects PC shipments to grow by a double-digit percentage, it said.
Shipments of motherboards and graphics cards are to contract 5 percent quarter-on-quarter during this quarter, which is better than a double-digit percentage decline previously posted during the slack season, it said.
PCs accounted for 59 percent of the company’s total revenue last quarter, while motherboards and graphics cards made up 40 percent, it said, adding that smartphones accounted for 1 percent.
The company posted a quarterly loss of NT$1.68 billion last quarter, compared with a loss of NT$3.82 billion in the fourth quarter of last year. That was the second unprofitable quarter for the PC brand based in Taipei’s Beitou District (北投).
Earnings per share were minus -NT$2.3 last quarter, an improvement on minus-NT$5.1 in the previous quarter.
During the first quarter of last year, the company posted net profit of NT$10.43 billion, or earnings per share of NT$14.
Operating profit margin improved to minus-3.6 percent last quarter, from minus-4.2 percent in the fourth quarter of last year — down from 7.9 percent a year earlier.
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