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Acer Q4 net profit up 25%; lags forecast

Acer Q4 net profit up 25%; lags forecast
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First Published: Tue, Feb 09 2010. 02 43 PM IST
Updated: Tue, Feb 09 2010. 02 43 PM IST
Taipei: Acer, the world’s No.2 PC brand, reported fourth-quarter earnings that lagged expectations, as it continued in its quest to expand its market share by aggressively selling low-cost netbook PCs.
Acer said in a statement on Tuesday that it made a net profit of T$3.51 billion ($110 million) in the October-December quarter, below market expectations for T$4.08 billion but better than the T$2.81 billion recorded a year earlier.
“We’re now watching to see how Europe is going to fare with the recent volatility in the euro,” said Vincent Chen, an analyst at Yuanta Securities. “Margins may come under pressure if the weakness continues, and that may hit Acer this year.”
For the whole of 2009, Acer posted a net profit of T$11.35 billion, lower than the T$11.74 billion it recorded in 2008.
The company did not give any guidance in the statement, but its chairman J.T. Wang has previously said he expects the company’s unit shipments to rise by between 35 and 40% this year, helped by growing demand in emerging markets.
Fourth-quarter operating profit margin rose by 0.1 percentage points from a year earlier to 2.9%, Acer said, above the company’s previous guidance of 2.8 %.
“Acer is being very aggressive in its quest to gain more market share,” said Jenny Lai, an analyst with CLSA. “It’ll have to keep watch very closely on price erosion, which is a big factor that may weigh very heavily on it.”
Acer is the market leader in the low-cost netbook PC segment — low-power notebook PCs optimised for Internet surfing and other web activities. It overtook rival Dell as the world’s No.2 PC brand last year.
Its shares have fallen about 10% so far this year, roughly in line with the benchmark TAIEX share index.
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First Published: Tue, Feb 09 2010. 02 43 PM IST
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