Asustek Computer hosted an investors conference on August 29, announcing that the company's sales performance in the second quarter was better than expected and achieved new records in operating profits and profits before tax, according to company president Jerry Shen.
Shen pointed out that the fourth quarter will be a crucial time for notebooks and tablet PCs after the launch of Windows 8 and Asustek with a successful transformation, will be the winner with shipments of 22 million notebooks in 2012.
Shen noted that there will be a new wave of competition in November and December that will reshuffle the rankings of notebook and tablet PC players. In the past, PC product designs were all based on Wintel's rules and did not achieve a good consumers experience. Asustek, learning from Apple, will try to complete the things that did not get done during Wintel era over the next two years.
Asustek announced consolidated revenues of NT$94.2 billion (US$3.15 billion) for the second quarter, up 4% sequentially with profits before tax reaching NT$6.3 billion, net profits after tax were NT$4.82 billion, and EPS was NT$6.4.
Asustek achieved a gross margin of 14.2% , up 0.3pp from the first quarter.
For the third quarter, Asustek CFO David Chang expects the company's revenues will enjoy a sequential growth of 10-15% to reach NT$103.6-108.3 billion.
As for revenue contributions in the second quarter, Asustek's notebook business contributed 61% of the total amount, motherboard/graphics card business contributed 14%, tablet PC business 8% and Eee PC business 7%, while other businesses together contributed about 10%. In terms of market contributions, 41% of the total amount was contributed by Asia Pacific markets, down 6pp from the first quarter, 39% were from Europe, up 3pp and other markets together 20%.
Asustek shipped 5.4 million motherboards in the second quarter, down 100,000 units from 5.5 million units in the first, while notebook shipments were 4.4 million units, up 7% sequentially, Eee PC shipments were 1.1 million units, up 22% sequentially, and tablet PC shipments 800,000 units, up 33% sequentially.
For the third quarter, Asustek expects its motherboard shipments will reach 5.8 million units, notebooks 4.8 million units, Eee PCs one million units and tablet PCs two million units, with annual performance for motherboards to reach about the same volume as in 2011, while notebooks will reach 18 million units, Eee PCs four million units and tablet PCs to surpass five million units, and to challenge six million units.
Commenting on market watchers' concerns that the Google Nexus 7's low price will affect Asustek's gross margins, Chang pointed out that although Nexus 7 has rather low profits, it will boost the company's overall tablet PC shipments and relatively drive up the company's operating profit rate performance for other product lines.
As for the price setting of Asustek's Windows 8 and RT-based products, Shen noted that the company will use the price of Apple's new iPad as a reference, and if Microsoft launches its Surface at US$199, Shen believes it will cause difficulty for Asustek's Windows-based tablet PCs to survive, but such a price point may also cause Surface to struggle for survival.
Revenue contribution by markets in the second quarter saw North America contribute 7%, Latin America 2.7% Asia Pacific excluding Japan and China 13.2%, China 13.3%, Western Europe 14.9% and Eastern Europe 21.9%. Shen pointed out that the company's market share in the US is rising quickly mainly due to the launch of Nexus 7 and he expects the share to rise to 11% in 2013.
Regarding emerging markets such as Brazil, India and China, Shen pointed out that the company has been working aggressively in these markets and is set to expand its influence in the markets.
Asustek already started producing Windows 8-based notebooks in July and is set to ship in September. In the fourth quarter, Shen expects touchscreen-based notebooks to account for 10% of its total Windows 8-based notebook shipments, while ultrabooks will account for 20% of its total notebook shipments.
For netbooks, Shen noted that Asustek will stop producing netbooks using Intel Atom N2600 processors in the fourth quarter, indicating that its Eee PC product line will be phased out of the market. In the future, the 10-inch notebook segment will be replaced by its Transformer tablet PCs, while it will launch notebooks using Intel Celeron, Pentium or entry-level AMD processors for the low-price 11.6-inch notebook segment to clearly separate notebooks from tablet PCs.
Source: DigiTimes
