Pegatron's performance in 2nd quarter in line with expectations
By Ted Chen,The China PostTAIPEI, Taiwan -- Contract manufacturer Pegatron (和碩) yesterday posted earnings per share of NT$0.61 for the second quarter and NT$1.62 per share for the first half of this year, in line with previous expectations.
August 13, 2013, 12:05 am TWN
In the first half of the year, the company accumulated revenues of NT$429.815 billion, up 10 percent year-on-year, and after-tax net income of NT$3.698 billion, up 85.9 percent year-on-year. Gross profit and operating income for the period reached NT$21.457 billion and NT$7.546 billion respectively.
Throughout the second quarter, Pegatron recorded revenues of NT$211.227 billion, declining by 2.5 percent quarter-on-quarter, and 3.2 percent year-on-year. Margins were recorded at 4.5 percent, down from the 5.5 percent seen in the last period. Net income reached NT$1.393 billion, down 39.6 percent year-on-year, while tumbling 27.6 on a year-on-year basis. Second quarter earnings-per-share reached NT$0.61, down 40 percent from the NT$1.01 posted in the previous quarter.
Pegasus Chief Financial Officer Lin Chiu-tan (林秋炭) stated that the demand for information technology products exceeded expectations, propelling a 12 percent quarter-on-quarter growth in related revenues contribution, reaching 46 percent of overall sales. Demand for consumer electronic products declined 27 percent quarter-on-quarter, with the segment representing 27 percent of overall sales, in line with expectations. Revenue contribution from telecommunications-related products grew 10 percent quarter-on-quarter, representing 27 percent of overall sales, exceeding expectations in volume of inventory pull in, and units shipped.
Lin attributed waning margins in the second quarter to a shift in the company's product offerings, saying that Pegatron is in the process of establishing new orders and readjusting its production capacity utilization. In addition, operations were affected adversely, as the firm had shifted its China-based production bases from Shanghai to Suzhou and Chonqing.
Pegatron observed that demand for consumer electronic products grew markedly by 95 percent, while demand for information technology- and telecommunications-related products declined by 14 percent and 15 percent respectively in the first half of the year.
Meanwhile, the market is expecting the company's performance to improve markedly in the second half of the year, with the impending launch of numerous high-profile products by Apple in the third and fourth quarter, including a new iPhone handset, a low cost iPhone variant, and a spec bumped iPad Mini tablet. The company is well-positioned to fulfill forecasts that it will fulfill over 60 percent of this year's sales targets in the second half of the year, with earnings results to improve as costs are driven down in the full-production phase, due to economies of scale.