Compal, Quanta Decline After HP Forecasts Profit Drop

Compal Electronics Co. (2324) and Quanta Computer (2382) Inc. lead Taiwan computer makers lower after customer Hewlett-Packard Co. (HPQ) forecast 2013 profit that missed analyst estimates, a sign demand is less than some had expected.

Compal fell 3.4 percent to NT$24.10, its lowest since April 3, 2009 on a closing basis, as of 12:09 p.m. in Taipei trading. Quanta Computer fell 4 percent, the most in two months. The benchmark Taiex index lost 0.1 percent.

Hewlett-Packard Chief Executive Officer Meg Whitman yesterday forecast 2013 profit that missed estimates and said a turnaround at the computer maker won’t happen soon. The PC market will expand less than 1 percent this year, the worst performance since it shrank in 2001, according to IDC.

Wistron Corp. (3231) dropped 4.8 percent, the most since July 27. Inventec Corp. (2356) declined 0.9 percent.

Wistron’s core notebook business faces a decline year on year in 2013 “as notebook makers start to consolidate their supplier base in an environment that has limited growth prospects,” Citibank analyst Wei Chen said in a report dated Oct. 3.

“Wistron appears to be losing orders from such key OEM clients as HP, Dell and Lenovo,” Chen said. The three customers make up 70 percent to 75 percent of the total notebook shipments for Wistron in 2012, said Chen who has a new sell rating on the shares with a target price of NT$29.

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