• Most Popular
  • Most Shared

Flextronics sees strong notebook PC growth

Mon Jul 13, 2009 5:03am EDT

Stocks

   

TAIPEI, July 13 (Reuters) - Electronics giant Flextronics (FLEX.O) forecast double-digit revenue and shipment growth from its notebook PC operations this year, as it makes a push against more established players, a top executive said on Monday. A key supplier to top brands including HP (HPQ.N), Acer (2353.TW) and Dell (DELL.O), the Singapore-based company expects its notebook PC unit to post a net profit margin similar to other players in the industry.

"Have you seen our profit margins?" Sean Burke, Flextronics' head of its computing unit, asked Reuters in an interview when asked how he intended to deal with the industry's low profit margins.

"The whole industry is operating on very thin margins and we've just got to make it work."

Flextronics recorded a loss of $239 million in the quarter ended March, or a negative proft margin, compared with net profit margins of over 2.5 percent at specialist notebook PC contract manufacturers including Quanta (2382.TW) and Compal (2324.TW).

Burke declined to comment on how much Flextronics earned from its notebook PC segment, but its computing unit, which also makes server computers, recorded revenue of $5.2 billion in the 2008 financial year according to company figures.

However, he said the company had the capacity to manufacture more than 300,000 laptop PCs per month at the beginning of 2009, and that would climb to over 1 million units per month by 2011.

That would translate into sales of about $500 million per month by 2011 if each notebook PC is sold for an average of $500 and its factories run at capacity.

Most top electronics brands choose to outsource production to contract manufacturers such as Flextronics and Hon Hai (2317.TW), which have large production facilities in lower cost countries.

(Reporting by Kelvin Soh and Roger Tung; 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)) Keywords: FLEXTRONICS/FORECAST Keywords: FLEXTRONICS/FORECAST

(C) Reuters 2009. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nTP364777


More from Reuters

A Greenpeace activist dressed as one of the "Four Horsemen of the Apocalypse" rides outside the parliament building during a brief protest in Copenhagen December 13, 2009. REUTERS/Christian Charisius

The face of climate protest

Protesters around the globe called for an end to global warming as climate talks in Copenhagen entered their sixth day.  Video 

    Climate conference
    In this photo reviewed by the U.S. Military, a guard leans on a fencepost as a Guantanamo detainee (L) jogs inside the exercise yard at Camp 5 detention center, at the U.S. Naval Base in Guantanamo Bay, January 21, 2009. REUTERS/Brennan Linsley/Pool

    Life after Guantanamo

    Critics are worried that Gitmo prisoners once dubbed "enemy combatants" will be using prisons as pulpits for anti-American rhetoric once they're moved to U.S. soil.  Full Article 

    U.S.
    Lockheed Martin Chief Executive Robert Stevens answers a question during the Reuters Aerospace and Defense Summit in Washington December 14, 2009. REUTERS/Molly Riley

    Lockheed eyes deals

    The future demands of cybersecurity make that sector one of many the aerospace giant sees as an acquisition target in the coming year.  Full Article 

    Aerospace and Defense Summit