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Compal Q2 beats forecast; analysts to up estimates

Compal Q2 beats forecast; analysts to up estimates
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First Published: Fri, Aug 28 2009. 03 05 PM IST
Updated: Fri, Aug 28 2009. 03 05 PM IST
Taipei: Taiwan’s Compal Electronics, the world’s No.2 contract laptop PC maker, reported market-beating quarterly earnings, helped by robust demand for notebook PCs and LCD televisions.
A key supplier to top brands such as HP and Dell, Compal did not offer any new outlook in its statement but analysts said they were likely to raise their estimates.
In the statement released after close of trading hours on Friday, Compal reiterated its previous forecast of a 20% rise in second-half revenue from the previous six months.
“We should see an upward revision in their earnings,” said Angela Hsiang, an analyst at KGI Securities. “There seems to be fairly good momentum, and we should be looking at raising Compal’s target price soon.”
Compal and its crosstown rival Quanta together manufacture more than half of all the world’s laptop PCs, and their shipment numbers and results are closely watched as a barometer to global technology demand.
Compal posted a net profit of T$3.237 billion ($98 million) in April-June, better than market expectations for a T$3.02 billion net profit. It was also slightly higher than T$3.2 billion reported a year ago.
The company’s gross profit margin slipped to 4.7% from the previous quarter’s 5 percent, as clients put pressure on prices to help them maintain profit margins in a weak market.
Compal’s revenue rose more than 40% in the second quarter from a year ago to T$121.9 billion. The company attributed this to better-than-expected shipments of its notebook PCs, flat-screen LCD televisions and effective cost controls.
Local media reports have named Compal as the contract manufacturer for Nokia’s impending netbook PC launch, but neither company has confirmed this.
Competition in the laptop PC contract manufacturing business has heated up in the past year, with new entrants such as Flextronics and Hon Hai entering the segment.
Compal shares have jumped over 90% this year, outperforming a 48% rise in the benchmark TAIEX share index.
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First Published: Fri, Aug 28 2009. 03 05 PM IST
More Topics: Compal | HP | Dell | Results | Q2 |