Quanta, Compal Forecast Waning Shipment Growth as Demand Ebbs

Quanta Computer Inc. (2382) and Compal Electronics Inc. (2324), the world’s largest contract makers of notebooks, forecast slowing growth in second-half shipments as the faltering global economy weighs on demand.

Shipments in the second half will climb about 5 percent from the first half, compared with 10 percent growth a year earlier, Quanta Chief Financial Officer Elton Yang said at a briefing in Taoyuan, Taiwan today.

Compal also cut its full-year shipments target amid signs consumers are holding off spending or switching to Apple Inc. (AAPL)’s iPad tablet. Global computer shipments climbed 2.3 percent in the second quarter from a year earlier, missing projections for 6.7 percent growth, as laptop demand waned, researcher Gartner Inc. estimated last month.

“The consumer notebook market in the second half hasn’t seen any clear seasonal movement, so shipments strength is weakening,” Yang said.

Quanta net income climbed 5.1 percent in the second quarter to NT$5.4 billion from NT$5.1 billion a year earlier, the company said in a statement today. That was in line with the average of 14 analysts’ estimates compiled by Bloomberg.

Compal second-quarter net income fell 49 percent from a year earlier to NT$3.28 billion at the parent level, missing the NT$3.5 billion average of 15 analysts’ estimates compiled by Bloomberg.

Shipment Growth Slows

Taoyuan, Taiwan-based Quanta’s second-quarter shipments grew 4.4 percent to 14.3 million units, the slowest year-on-year increase in at least four years, according to Bloomberg News calculations based on monthly data reported by the company. Non- notebook products will account for around 25 percent to 30 percent of revenue for the full year, Yang said.

Compal cut its full-year shipment forecast to 42 million units from a previous target of 48 million on weaker demand and declining orders for low-cost netbooks, Compal President Ray Chen said today.

Compal’s 12 percent shipments decline from a year earlier is the first second-quarter drop in at least four years, according to Bloomberg calculations based on monthly data from the company.

“The second half is not as strong,” Chen said, saying the European debt crisis and U.S. economy were weighing on sales. “Each of our customers sees demand being weaker in the future.”

Quanta maintained its full-year shipment growth target of 5 percent to 10 percent from a year earlier.

Quanta consolidated sales fell 7 percent in the second quarter from a year earlier to NT$274 billion, while Compal revenue fell 22 percent to NT$176.4 billion.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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