Acer Net Misses Estimates on Dropping Sales, Market Share
Acer Inc. (2353), Asia’s second-largest computer maker, posted third-quarter profit that missed estimates amid declining sales and market share as consumers held off purchases ahead of the release of Microsoft Corp. (MSFT)’s next Windows operating system this month.
Net income was NT$68 million ($2.3 million), the Taipei- based company said in a statement last night. That compares with the NT$503 million average of 18 analyst estimates compiled by Bloomberg. Acer had a net loss of NT$1.1 billion a year earlier.
Acer’s shipment decline for the quarter was wider than the industry’s as the company’s sales of Ultrabooks, light notebooks that mimic Apple Inc. (AAPL)’s MacBook Air, failed to meet expectations. The release of Windows 8 this month may not be enough to spur sales growth in the coming quarter.
“There are substantial risks around Acer’s Ultrabook strategy, given the Ultrabook market may not be as large as Acer believes and that it may incur substantial promotional and marketing expenses,” Alberto Moel, who rates the shares market perform at Sanford C. Bernstein in Hong Kong, wrote in an Oct. 18 report.
Consolidated sales fell 11 percent on year to NT$104 billion, Acer said yesterday. That’s less than the NT$110 billion average of 19 analyst estimates compiled by Bloomberg. The third-quarter profit is wider than the NT$56 million it posted in the prior three months.
Before last year, Acer’s quarterly net income hadn’t dropped below NT$1 billion since 2003.
Operating income, which measures revenue less operating costs, was NT$345 million, less than the NT$433 million of the prior quarter and an improvement over an operating loss a year earlier. Acer didn’t explain the results in its statement. Spokesman Henry Wang didn’t immediately answer calls to his office yesterday.
Acer’s shares dropped 0.9 percent to NT$26.95 at the close of trade in Taipei yesterday, before the announcement. The stock is down 23 percent this year, lagging a 4.3 percent advance in Taiwan’s benchmark Taiex (TWSE) index.
The company’s shipments fell 10.2 percent from a year earlier, wider than an 8.3 percent decline for the broader market, with its market share dropping to 9.9 percent, researcher Gartner Inc. wrote Oct. 10.
“The third quarter was also a transitional quarter before Microsoft’s Windows 8 operating system release, so shipments were less vigorous as vendors and their channel partners liquidated inventory,” Gartner wrote at the time.
Acer posted its first annual loss last year after writing off inventory amid a slump in demand for consumer PCs and the increased popularity of tablets. Weaker-than-expected sales of its Ultrabooks, a product designed by Intel Corp. (INTC), has damped the company’s recovery, Kirk Yang, a Hong Kong-based analyst at Barclays Plc, wrote earlier this month.
Acer will hold an investors conference on Oct. 25 in Taipei.
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