Leading industrial PC maker Advantech Co (研華) yesterday offered a conservative outlook for the second half of the year after posting record sales and profit in the first half, citing China’s shaky economic recovery and high global inflation as factors.
For this quarter, the company expects revenue momentum to weaken on the back of a significant slowdown in new orders, Advantech chief financial officer and president of general management Eric Chen (陳清熙) told an investors’ conference in Taipei.
Third-quarter sales are likely to drop 10 percent from the previous quarter, or down 20 percent from a year earlier, the company said, adding that the outlook for the fourth quarter would improve slightly.
Photo: Fang Wei-chieh, Taipei Times
That comes as the company's book-to-bill ratio has been on a downtrend and remained below 1 over the past few quarters due to weakening order momentum from clients and waning demand for consumer electronics.
The ratio fell further to 0.79 last quarter, from 0.82 percent in the first quarter and 0.92 percent in the fourth quarter of last year, suggesting a downbeat sales outlook going forward.
Advantech, the first regional industrial PC vendor dedicated to smart cities and the Internet of Things (IoT), expects revenue this quarter to range between US$480 million and US$500 million, it said.
Gross margin would be between 38.5 and 40.5 percent, while operating margin would be between 16 and 18 percent, it added.
“Despite the anticipated slowdown in revenue momentum in the second half of the year, the company’s overall profitability is projected to steadily increase, as raw material prices normalize and operating efficiency improves,” Chen said.
Advantech reported net profit of NT$3 billion (US$94.9 million) in the second quarter, up 22.26 percent from a year earlier and 1.52 percent from the previous quarter, or earnings per share of NT$3.51, the third-highest in the company’s history and beating market expectations.
Second-quarter revenue was NT$17.03 billion, up 1.21 percent year-on-year, the company said.
Both gross and operating margins improved last quarter and outperformed the company’s historical average to reach 41.2 percent and 20.1 percent respectively, it added.
Overall, Advantech’s cumulative net profit in the first half of the year increased 18.55 percent year-on-year to NT$5.96 billion, or earnings per share of NT$6.97, while revenue grew 4.49 percent to NT$34.42 billion, both record highs.
By region, sales to Europe and North Asia in the first half remained strong, rising 13 percent each from a year earlier, while shipments to North America rose 4 percent.
However, sales to China fell 17 percent due to sluggish demand, the company said.
Sales dropped 27 percent in Taiwan and shrank 15 percent in emerging markets in the first six months compared with a year earlier, it added.
The company said its embedded IoT group showed robust sales growth in the first half, increasing 13 percent from a year earlier, while applied computing and industrial cloud groups reported single-digit percentage growth over the same period.
However, the industrial IoT group saw sales fall 8 percent from a year earlier, affected by China’s slowdown, while the service IoT group’s sales dropped 13 percent due to the deceleration of shipments for major medical and retail projects, the company said.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
Taiwanese artificial intelligence (AI) server makers are expected to make major investments in Texas in May after US President Donald Trump’s first 100 days in office and amid his rising tariff threats, Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA, 台灣電子電機公會) chairman Richard Lee (李詩欽) said yesterday. The association led a delegation of seven AI server manufacturers to Washington, as well as the US states of California, Texas and New Mexico, to discuss land and tax issues, as Taiwanese firms speed up their production plans in the US with many of them seeing Texas as their top option for investment, Lee said. The
RSS