Compal to Cut Third-Quarter PC Shipment Forecast on Slowing Global Demand
Compal Electronics Inc., the world’s second-largest maker of notebook computers, will cut its forecast for third-quarter shipments as global demand slows, Chief Financial Officer Gary Lu said.
“All sectors are weak: Europe is only stable, the U.S. has weakness,” Lu said in a phone interview today, without providing the revised estimate before a investors’ conference on Sept. 1. “Emerging markets, including China, at this moment are very slow.”
Compal, which supplies to Hewlett-Packard Co. and Dell Inc., is revising its outlook after Acer Inc. had its biggest decline in parent-level revenue in at least five years and U.S. retailer Costco Wholesale Corp. said electronics sales fell. Consumer spending in the U.S. was unexpectedly flat in June, while China’s retail sales growth was the slowest in six months in July.
“There’s uncertainty about the economic outlook in the third quarter and even into the fourth quarter,” said Arthur Hsieh, who rates Compal “neutral” at UBS AG in Taipei.
Compal, based in Taipei, on June 1 forecast shipments would rise as much as 10 percent in the third quarter, from the 12.3 million notebooks it shipped in the prior quarter. Compal is scheduled to report second-quarter earnings Aug. 31, Lu said.
‘Weak’ Demand
Compal fell 0.1 percent to NT$36 at 12:31 p.m. in Taipei, after earlier rising 0.6 percent. The stock is down about 17 percent for the year, compared with a 5.7 percent decline in the Taiex index.
Quanta Computer Inc. the world’s largest contract manufacturer of notebooks, will report second-quarter earnings on Aug. 31. Elton Yang, spokesman for the Taoyuan, Taiwan-based company didn’t answer calls to his mobile phone today.
Asustek Computer Inc., Taiwan’s second-largest computer maker, on Aug. 13 forecast demand in Europe and the U.S. would “remain weak” this quarter.
Acer, the world’s largest maker of notebook computers, posted a 38 percent drop in July parent-level sales, the slowest in at least five years, according to Bloomberg data.
China’s retail sales climbed 17.9 percent in July from a year earlier, the slowest since January.
Issaquah, Washington-based Costco posted a “slight” drop in revenue from electronics in July with computers sales “flat” from a year earlier, Bob Nelson, vice president of financial planning and investor relations, said on a conference call on Aug. 5.
To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.
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