UPDATE 1-Acer Q3 loss worse than expected; Q4 a concern
* Q3 net loss T$1.1 bln vs forecast loss T$807.5 mln
* Channel inventories back to normal level in Q3
* Competition from Amazon, component disruption are risks in Q4-analyst (Add details and analyst comment)
By Clare Jim
TAIPEI, Oct 21 (Reuters) - Taiwan's Acer Inc reported a worse-than-expected unaudited net loss in the third quarter as it struggles with stiff competition from tablet PCs and the effects of a restructuring, but said inventories have significantly reduced.
The Taiwanese PC vendor has been a dominant force in the industry, particularly in the low-cost notebook segment, but has failed to counter the runaway success of tablets such as Apple's hot-selling iPad that have cut into PC sales and hurt profits.
Analysts were cautious about Acer's capability to turn around in the fourth quarter, when it will have to contend with Amazon's cheap Kindle Fire tablet and component disruption resulting from the flooding in Thailand.
In July to September, Acer posted a net loss of T$1.1 billion ($36.37 million), worse than a consensus forecast of an T$807.5 million loss from 12 analysts polled by Thomson Reuters I/B/E/S.
The figure also compared with a net loss of T$6.79 billion in the second quarter. In the third quarter a year earlier, audited net profit was T$4.29 billion.
"Considering Amazon's Kindle Fire is selling so well, Acer might have to start writing off some of its tablet inventory, after clearing its notebook inventory," said Yuanta analyst Vincent Chen.
He added that the supply chain disruption caused by the floods in Thailand might result to a 30 percent drop in output for the global PC industry, and if the disruption persists into December, it will also harm sales in the first quarter.
Acer said in a brief statement that revenue in the third quarter grew from the previous quarter with channel inventories significantly reduced to a reasonable level.
It did not elaborate further in the statement but it will give more details at an investor conference next Friday.
Acer's Chairman J.T. Wang said in August the company would post a loss in the third quarter, and that it would be impossible to break even for the full year.
The company has been refocusing on mobile devices to drive growth after a first half that saw the acrimonious departure of its chief executive following a row over the company's strategy and a series of cuts to its shipment forecasts.
On Friday, shares of Acer declined 1.24 percent, underperforming broader market's 0.14 percent rise. ($1 = 30.245 Taiwan Dollars) (Editing by Jonathan Standing)