Acer profit rises as faces up to downturn
TAIPEI (Reuters) - Taiwan's Acer Inc, the world's third-largest PC brand, said on Tuesday its fourth-quarter net profit rose but missed forecasts as revenue fell along with consumer and corporate demand for tech goods.
But the company, which analysts say is riding out the downturn better than some rivals, gained ground at the fast-growing budget end of the market and drove down its cost base to preserve margins.
October-December net profit of T$2.81 billion ($82.9 million) was up 17.1 percent but lower than the T$3.1 billion a Reuters Estimates poll of eight analysts was expecting.
Revenue fell 8 percent to T$134.9 billion, as consumers and companies affected by the global financial crisis reined in discretionary spending.
"They've been protecting their operating profit margin, and will continue to do so," said Vincent Chen, an analyst at Yuanta Securities, who rates the company a "buy."
"Acer has been cutting costs and expenses very successfully, and these results show that they're looking in fairly good shape."
Acer's operating margin was 2.94 percent in the fourth quarter, outperforming its smaller crosstown rival Asustek, whose negative margins led to a loss of T$2.8 billion during the same period.
Acer shares have reflected the company's success in the low-cost segment, having climbed nearly 40 percent this year, outpacing the benchmark TAIEX share index's 14 percent gain.
The company has remained relatively resilient during the global financial crisis on the back of its highly popular low-cost netbook PC line, and figures from research house IDC show Acer's market share grew by three percentage points last year.
The netbook PC - a less powerful computer designed mainly for web browsing and e-mails - is tipped as one of the bright spots in the sector this year, with IDC expecting shipments to more than double in 2009, compared to 3.9 percent growth for the overall PC sector.
TECH SECTOR REBOUND?
The technology sector has shown signs of warming up in recent weeks, with industry stalwart TSMC, the world's top contract chipmaker, recalling staff who were previously put on unpaid leave.
On Tuesday, contract laptop PC maker Compal Electronics said it would be increasing its workforce by about 30 percent by June on rising orders from clients in China, Europe and the United States.
The company did not give any outlook when it released the results after trading hours, but it previously said it wanted to increase its share of the global PC market by 2-3 percentage points.
IDC says Acer shipped over 32 million PC units last year, lagging global leader Hewlett-Packard and Dell, but ahead of Lenovo and Toshiba.
(editing by John Stonestreet)
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