TAIPEI Jan 17 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)