UPDATE 1-Compal revises up Q4 shipment target; shares up

Tue Nov 24, 2009 8:46pm EST

* Q4 shipments now seen up 20 pct q/q; pvs up 10 pct q/q

* Helped by low inventories, Windows 7, strong demand -CFO

* Shares up 2 pct in early trade, beating main board (Adds details, background)

TAIPEI, Nov 25 (Reuters) - Compal Electronics (2324.TW), the world's No.2 contract laptop maker, expects fourth-quarter personal computer shipments to climb more than previously expected, its chief financial officer said on Wednesday, pushing its shares up 2 percent in early trade.

Compal expected PC shipments to climb 20 percent in the fourth quarter from the preceding three months, up from its previous forecast of 10 percent, Chief Financial Officer Gary Lu said.

"Client inventories are looking very low; there's the Windows 7 effect, and demand seems to be quite strong right now," Lu said. "The existing forecast seems to be on the low side and that's why we're revising it upward."

By 0135 GMT, Compal shares were up about 2 percent, outperforming a 0.8 percent advance on the benchmark TAIEX share index .TWII as investors bet on a sustained recovery in the PC sector.

Compal's upward revision of its shipment forecast comes as clients such as HP (HPQ.N) announced better-than-expected results, while othersincluding Dell DELL.O said Microsoft's (MSFT.O) Windows 7 operating system had helped spur purchases of new PCs. [ID:nN23242457] [IDnTP264164]

Local media had earlier also reported that Compal's bigger rival Quanta (2382.TW) had also revised upwards its forecast for the first quarter, with shipments expected to fall 5 percent from a 10 percent decline forecast previously.

Research firm Gartner also revised upwards its 2009 forecast for PC sales to rise 2.8 percent to 299 million units earlier this month, citing stronger-than-expected third-quarter sales helped by inexpensive consumer netbooks and notebooks. [ID:nN23505742] (Reporting by Kelvin Soh; Editing by Chris Lewis) ((kelvin.soh@thomsonreuters.com; +886 2 2508 0815; Reuters Messaging: kelvin.soh.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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