Quanta records healthy profit

The result was largely achieved on the back of an asset sale; meanwhile, the company's sales in the three months to Sept. 30 rose 6 percent

Quanta Computer Inc (�A�B�d�I), the world's largest notebook maker, posted its highest quarterly profit last quarter after disposing of a money-losing unit.

The company's net income in the three months to Sept. 30 was NT$3.86 billion (US$116 million), or NT$1.15 per share, a rise of 13 percent from NT$3.42 billion, or NT$1.06 a share, in the same period last year.

The profit rise was attributable to the disposal of Quanta's panel-making unit Quanta Display Inc (QDI, �A�P�d�q), Jason Lin (�ьQ��), the director of the company's strategic investment division, told reporters at its Taoyuan headquarters yesterday.

Quanta announced in April that it planned to sell QDI, in which it holds a 27 percent share, to larger rival AU Optronics Corp (�F�B���d) for NT$71.7 billion in stock.

The acquisition was completed on Oct. 1 and Quanta was not required to recognize QDI's losses in the third quarter based on Taiwan's accounting rules, the company said.

Quanta absorbed QDI's losses, which came to NT$1.5 billion, in the second quarter. This caused the computer maker's net income in that period over the year earlier to drop to NT$2.11 billion.

Quanta's sales last quarter rose 6 percent to NT$109.9 billion. Gross margin was 5.1 percent, down from 6 percent last year, the company said.

But the company failed to achieve the targeted quarterly notebook shipment growth of 20 percent. Notebook sales grew only 7 percent - 4.6 million units - last quarter.

"We forecast better shipments earlier as clients said they would place more orders," Lin said.

Quanta expects shipments of notebooks will rise 30 percent next quarter to 6 million units due to seasonal factors, but it adjusted downward the whole-year volume to 20 million, down from 21 million.

Next year's total shipments would likely increase 25 percent to hit 25 million, the company said.

Non-core businesses - including liquid-crystal-display (LCD) TVs, handsets, automotive electronics, servers and storage products - are expected to account for 25 percent of total revenues next year, up from this year's 20 percent, Lin said.

Quanta is in a bid to beef up the low margin of its notebook products, and hopes to push other business segments to at least 30 percent of total sales by 2008.

Non-core businesses look promising next year, as handset shipments will grow to 3 million from 2 million this year, while LCD television shipments will rise at least two fold from this year's 300,000 units, Lin said.

Sales of servers will grow 20 percent, while vehicle electronics will expand by 50 percent, he said.

Quanta is also expecting to cash in on the business opportunities -- especially in servers and storage products -- when shipments of the "One Laptop per Child" (OLPC) project starts next year.

"Some countries do not have a basic IT infrastructure and there is untapped business potential following the project's rollout," said Michael Wang (���k��), Quanta's president.

These simple laptops will only cost approximately US$100 - much cheaper than the current mainstream notebook models sold at US$600 - as they became available to children in developing nations including Libya, Thailand, Nigeria, Brazil and Argentina.

The OLPC laptops will officially be rolled off production lines in the second quarter next year, Wang said.

source: Taipei Times