Acer Q2 2011 Preliminary Financial Report

Acer has reported its first ever quarterly loss and says it will be impossible for the company to break even for the full-year and the company lost T$6.79 bln much more than the consensus T$3.3 bln loss expected. That’s a dramatic drop off from the 1.19 billion TWD profit the company posted in Q1 and Acer still expects to operating in the red until at least Q4……..

 

Acer nnounces the preliminary financial results for Q2 2011. Consolidated revenue was NT$102.1B (US$3.5B), down 32% year-on-year (YOY), operating loss was NT$7.1B (US$246M), profit after tax (PAT) was -NT$6.8B (-US$236M) and earnings per share (EPS) was -NT$2.57. The Q2 loss accounts for US$150 million in sales allowance to clear channel inventory in EMEA, US$30 million for cost of EMEA reorganization, inventory clear-up due to sluggish economic situation, and senior executive severance pay. For first half (1H) 2011 preliminary results, Acer’s consolidated revenue was NT$229.9B (US$8.0B), declining 26% YOY. Operating loss was NT$5.2B (US$179M) due to unfavorable internal and external impacts on company in Q2. PAT was -NT$5.6B (-US$195M) and EPS was -NT$2.12. Under a new strategy, Acer‘s business model is changing from monitoring product sell-in only to include the final product sell-through, which means to keep closer watch on the market end for better total inventory control. In Q2 Acer made efforts to further downsize channel inventory due to stagnant European and US economies, and the slow PC market. Additionally, the company paid considerably in senior executive severance pay. Consequently, Acer suffered higher than expected loss in Q2. In Q3 2011, Acer expects revenue growth and improved gross margin quarter-on-quarter (QOQ). As for Q4 2011, Acer anticipates a stable business operation and better gross margin from Q3. Acer¬† consolidated revenue includes revenues from other companies in which Acer has 50% or more ownership, and already deducts any revenues between Acer and these companies to avoid double-counting.

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