Weak product sales for April take bite out of Acer stock


TAIPEI — Shares of Acer Inc., one of the world’s leading personal computer vendors, took a beating yesterday after the company posted a 20-percent month-on month decline in unconsolidated sales for April, dealers said.

Acer closed down 0.62 percent at NT$32.00, recovering from an early low of NT$30.35 on bargain hunting.

“The sell-off showed weak market confidence in Acer’s earnings outlook, particularly after the company reported a big drop in April sales,” Concord Securities analyst Henry Sun said.

“It came as no surprise that investors rushed to dump their holdings of Acer shares soon after the local bourse opened,” Sun said, referring to the heavy trading volume.

Acer reported NT$25.27 billion in unconsolidated sales for April, compared with NT$31.75 billion recorded in March. The April figure was down about 11 percent from a year earlier.

In the first fourth months of this year, Acer recorded NT$121.76 billion in unconsolidated sales, down 6.74 percent year-on-year.

Sun said the market had expected the PC business to leave behind the slow-season effects seen in the first quarter and improve for the rest of the year.

“However, Acer’s latest sales data indicated that the pace of recovery remains slow,” Sun said. “Acer in particular needs time to adjust its product portfolio after its massive write-down to clear its inventory last year.”

Acer incurred NT$6.6 billion in net loss, or loss per share of NT$2.52, for the whole of 2011 after it spent US$150 million in one time write-down to clear inventory in its European operations.

The company plunged into the red in the second and third quarters of last year, but swung to profit in the fourth quarter and continued the upswing in first quarter of this year.

Its earnings per share for the fourth quarter of last year stood at NT$0.03 and rose to NT$0.12 in the first quarter of this year.

“Despite the turnaround in Acer’s bottom line, market sentiment toward the stock remains cautious,” Sun said.

Sun said his brokerage expects Acer’s consolidated sales for the second quarter to stay flat or increase by about 5 percent from the NT$113 billion recorded in the first quarter. Its momentum in the second quarter is unlikely to be strong, he added.

“The PC business is expected to regain significant steam in the second half of this year with the launch of new models equipped with Intel’s Ivy Bridge processor and Microsoft’s Windows 8 operating system,” Sun said.

“At present, investors are simply seizing the April sales data as an excuse to sell Acer shares,” Sun said.