* Expects H2 laptops shipments to grow 5 to 7 pct on year
* Expects Q2 PC shipments to grow 10 pct on quarter
* Shares rise 1.1 pct as benchmark closes flat
(Adds company comment, context)
By Michael Gold
TAIPEI, Aug 14 Taiwan's Quanta Computer Inc
, the world's largest contract manufacturer of personal
computers (PCs), expects laptop PC shipments to grow slightly in
the second half of 2014 from a year earlier thanks to companies
replacing old computers.
Quanta, which earlier on Thursday reported flat quarterly
profit short of analyst estimates, expects to ship 5 to 7
percent more laptops in July-December. It also said overall PC
shipments would grow 10 percent in the third quarter over the
The rise comes as the global PC market shows signs of
"rebalancing" after two years of decline, brought about by the
popularity of tablet computers, said Quanta President and
Vice-Chairman C. C. Leung.
"We're seeing the trend of industrial PC replacement in
tandem with the increased popularity of new types of
consumer-based PCs" such as laptops with detachable keyboards,
Leung said during a press conference called after the company
Quanta, which assembles computers and iPods for Apple Inc
, reported second-quarter net profit of T$4.07 billion
($135.69 million), versus a T$4.52 billion mean estimate of 18
analysts polled by Reuters. Last year, second-quarter profit was
Shares of Quanta closed up 1.1 percent ahead of the earnings
release, against a flat TAIEX index.
To reduce the impact of falling PC demand, Quanta has
branched out into next-generation devices such as wearables. It
will assemble at least 70 percent of Apple's first smartwatch
due for release in the coming months, a person familiar with the
matter told Reuters.
It is also manufacturing more servers capable of remotely
storing huge amounts of data for companies such as Facebook Inc
But just as diversification may begin to pay off, Quanta
could see its PC fortunes turn around as the global market has
shown signs of stabilising recently.
Researcher Gartner reported an end to two years of market
contraction by reporting neither growth nor contraction in the
in the second quarter, and chip maker Intel Corp
forecast a jump in third-quarter revenue on replacement demand.
Even PC brand Acer Inc, which has fallen in the
ranks in recent years, reported two straight quarters of net
profit this year after a string of losses.
But clouding the outlook is rival PC assembler Pegatron Corp
, which forecast third-quarter laptop shipments to
contract by 5 to 10 percent from the previous three months,
citing continued weakness in the market.
(Editing by Christopher Cushing)