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Acer hopes to break even in Q1 on tablet demand

Reuters   March 19, 2013
First Published: 17:52 IST(19/3/2013) | Last Updated: 17:55 IST(19/3/2013)

Taiwan's Acer Inc expects to break even this quarter on a surge in tablet shipments, after posting a bigger-than-estimated loss in the fourth quarter which pushed full-year earnings into the red.

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The world's No. 4 PC company by shipments forecasts this quarter's tablet shipments will by 2.9 times higher than in the previous quarter, while volumes for desktop and notebook PCs will decline 10-15 percent.

Some analysts were sceptical, expecting no earnings turnaround until the third quarter as the company plans to introduce no new products in the first half.

Vincent Chen, an analyst at Yuanta Securities, expected the company to make small net losses in the first and second quarters due to higher operating expenses, smaller notebook shipments and slimmer margins from low-priced tablets.

"I forecast Acer will write off another T$3.5 billion for goodwill on Gateway this year," he said, referring to Acer's purchase of the computer firm in 2007.

Earlier this month, Acer president Jim Wong told reporters the company targets to grow tablet shipments by 3.5 times this year to close to 10 million, and to double marketing fees to 1.5 percent of total expenses.

He also said the company will launch new products mainly in the second half.

On Tuesday, Acer said its net loss last quarter was T$3.37 billion compared with a net profit of T$68 million in the previous quarter and T$100 million in the same period a year ago.

Ten analysts forecast Acer a net loss of T$2.99 billion in the quarter, according to a poll by Reuters.

Acer said in January it would recognise a total of T$3.5 billion impairment for trademark rights on its four brands, including Gateway, Packard Bell, eMachines and E-Ten.

For the full year 2012, the company recorded a net loss of T$2.91 billion, narrowing from a net loss of T$6.6 billion in 2011.

Shares in Acer ended 1.7 percent higher before the earnings announcement was released, versus a 0.35 percent rise in the broader market .TWII.

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