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Compal Electronics 2nd-Quarter Profits Slide as Shipments
Jump
Compal Electronics 2nd-Quarter Profits Slide as Shipments Jump
Taipei, July 15 (Bloomberg) -- Compal Electronics Inc., one of Taiwan's largest notebook computer
makers, said shipments surged in the second quarter compared with the first, though profits lagged as
higher component costs squeezed margins.
Notebook shipments jumped to 250,000 in the second quarter from 200,000 in the first, while pretax
profit was ''a little bit lower'' than the first quarter's NT$1.56 billion ($48 million), said spokesman Gary
Lu. The profit weakness mainly reflected a 40 percent rise in prices for liquid crystal displays during the
first half. LCDs are used in screens for notebook computers.
Compal expects to meet its target of shipping 1.24 million notebooks this year, along with its forecast of
record pretax profit of NT$5.6 billion. For 2000, the company said it expects to ship two million units,
mainly to Dell Computer Corp., its biggest customer, Hewlett-Packard Co. and Fujitsu Ltd. ''It's a
worldwide trend that personal-computer customers will continue to outsource production,'' Lu said.
Manufacturers in Taiwan have ''the best chance to benefit from that, because (Taiwan's) costs are
lower and the manufacturers don't compete with clients'' by making own-brand products, in most
cases.
Worldwide shipments of notebook computers are expected to jump 17 percent this year to 18.3 million,
and to reach 20.8 million next year, according to research firm International Data Corp. Taiwan's share
of those shipments was 39 percent last year, and is expected to rise to 45 percent this year and 53
percent in 2000.
Compal said it does not now expect to achieve NT$100 billion in annual sales until 2001. The
company said earlier it might meet that target next year, but the rising popularity of low-cost PCs has
squeezed margins and sales.
Lu declined to comment on reports that Compal received a trial-run notebook order from Toshiba Corp.
Compal stock has risen 43 percent this year, compared with a 21 percent rise in the benchmark TWSE
stock index. Today, it fell NT$2.5 to NT$111.50 in mid-session trading.
NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min.
<<<< ''It's a worldwide trend that personal-computer customers will continue to outsource production,'' Lu said.>>>
Dan Niles, where are you?
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