Asustek completes its share buyback ahead of proposed deadline
CNATAIPEI--Asustek Computer Inc., one of the world's leading personal computer vendors, has completed its share buyback program ahead of schedule, but analysts said it failed to achieve its purpose.
August 22, 2013, 12:04 am TWN
In a statement filed with the Taiwan Stock Exchange on Tuesday, Asustek said it spent a total of NT$2.53 billion (US$84.33 million) on the program, and the average purchasing price of the 10 million shares it bought back from the open market was NT$252.60.
Asustek announced the share repurchasing plan on July 1 to lend support to its sagging share price amid falling demand, pledging to buy back 10 million shares at prices ranging between NT$240 and NT$300 during the July 2-Aug. 30 period.
The company's shares had been hammered in the days before the plan was made public, falling 10 percent in two trading sessions to NT$258 on June 29, after the company forecast a 10 percent annual decline in notebook computer shipments in 2013.
Market analysts said Tuesday's announcement indicated that the company had moved aggressively to prop up its share price, but the move was still seen as a failure because Asustek shares remain depressed, closing at NT$243.50 on Tuesday.
Analysts said the buyback of 10 million shares was insufficient to take on foreign institutional selling amid lingering concerns over the company's shipments and bottom line.
The 10 million shares bought under the program will be canceled in a bid to strengthen the company's earnings per share.
In the second quarter, Asustek posted NT$4.77 billion in net profit, down 21 percent from the first quarter, while its earnings per share for the April-June period stood at NT$6.3, down from NT$8.04 a quarter earlier.
Although Asustek could benefit from peak season effects in the third quarter to post a 10-15 percent sequential increase in sales, such a gain will not be significant to an international brand like Asustek, analysts said.