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UPDATE 1-Pegatron's move to mobiles lifts profit as computers continue slide
May 8, 2014 / 7:40 AM / 4 years ago

UPDATE 1-Pegatron's move to mobiles lifts profit as computers continue slide

(Recasts, adds company comment, background)

* Q1 net profit hits $90.68 million

* Communication devices contribute 38 percent to qtrly revenue

* Computing contributes 31 percent to qtrly revenue

By Michael Gold

TAIPEI, May 7 (Reuters) - Taiwan’s Pegatron Corp, a major manufacturer of electronic goods for companies like Apple Inc, will continue its shift into high-growth devices like smartphones even as it stresses the importance of the personal computer to its overall product mix.

The company, which industry watchers believe will be one of the manufacturers of Apple’s upcoming large-screen iPhone alongside larger rival Hon Hai Precision Industry Co Ltd , reported Wednesday that revenue from communication devices grew 82 percent in the first quarter from a year earlier, while revenue from computing contracted by 13 percent.

That led to communication devices contributing 38 percent to overall quarterly revenue, compared to only 31 percent for computing.

But it also predicted notebook shipment volume in the second quarter to grow by up to 5 percent over the first quarter.

“The computer is changing, it’s not disappearing,” CEO Jason Cheng said during the company’s quarterly investor conference, citing devices like the Chromebook from Google Inc as a possible path for the personal computer’s evolution.

Pegatron had previously reported a first-quarter net profit of T$2.73 billion ($90.68 million), a increase of 18.5 percent on-year, versus expectations of a 13 percent decline.

The figure lagged net profit of T$3.38 billion in the previous quarter.

Pegatron, which previously had predicted a turnaround in persistently weak global PC sales, is adapting to rapidly-changing consumer tastes in once-high-margin products like smartphones.

Researcher IDC projects smartphone sales growth to moderate to 19 percent this year from 39 percent in 2013. It also said worldwide PC shipments declined 4.4 percent in the first quarter from a year earlier.

Apple said in April that sales of iPhones in the first quarter beat expectations while investors await a new game-changing product from the California-based innovation powerhouse.

$1 = 30.1045 Taiwan dollars Reporting by Michael Gold

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