Acer fourth-quarter loss leads to 30 percent executive pay cut
TAIPEI (Reuters) - Executives at Taiwan's Acer Inc will take a 30 percent pay cut after the beleaguered company reported a greater-than-expected net loss on continued weakness in its flagship PC products.
For the fourth quarter, the world's No.4 PC vendor reported a net loss of T$7.6 billion ($254 million), compared to expectations of a T$3.69 billion ($122.66 million) loss according to Thomson Reuters I/B/E/S. The loss includes a NT$1.3 billion write-down in raw materials inventory and other costs.
The company had posted a worse-than-expected net loss of T$13.12 billion in the third quarter and a T$3.37 billion loss in the same quarter of 2012. It has reported losses or meager profit at best every quarter for almost three years.
"Acer acknowledges missteps in the past on resource allocation and the over expectation of ultrabooks and notebooks with touchpanel," the company said in a press release. "Although the products were leading in design they did not accurately fulfill market needs."
Chief financial officer Eva Ho told reporters at a press conference that the company will continue to face challenges but that losses should continue to shrink. Coming on the heels of a previously announced 7 percent reduction in workforce and other cost-cutting measures, Ho did not rule out future job cuts.
As part of a turnaround strategy, in December the company named former Taiwan Semiconductor Manufacturing Co Ltd sales executive Jason Chen as its new CEO and launched a new initiative to integrate hardware, software and cloud services.
Rocked by rapidly-changing tastes in consumer electronics and the overall decline of the PC industry, Acer's market share has declined from the double-digit levels it enjoyed from 2008 to mid-2011, according to data from research firm IDC.
The company remains stuck in the weakest sector of the PC market, focusing on consumer sales while rivals like Hewlett-Packard Co and Lenovo Group Ltd push harder into enterprise PCs and servers.
It also hasn't made significant inroads into the faster growing tablet sphere, losing out to heavyweights Apple Inc and Samsung Electronics Co Ltd.
Executive-level reshuffling has also led to criticism that the company lacks strong leadership, as Chen is the company's second CEO since Italian-born Gianfranco Lanci left acrimoniously in 2011. In November, then-corporate president Jim Wong had been announced to take on the CEO position, only to step down two weeks later.
Co-founder Stan Shih also returned in November as chairman in an effort to stanch the bleeding.
Analysts fault the company for lack of a clear strategy and path to profitability on its "Build Your Own Cloud" campaign, which the company has trumpeted as the wave of the future.
($1 = 30.0835 Taiwan dollars)
(Editing by Matt Driskill)