Asustek 2Q16 brand operations down

Asustek Computer saw global brand operations in the second quarter of 2016 drop on quarter and on year in terms of revenue and profitability, the company said at an August 12 investors conference.

However, Asustek recorded non-operating income of NT$1.542 billion (US$48.2 million) in the second quarter, including a gain of NT$942 million from foreign exchange.

Of second-quarter revenues of NT$93.938 billion, 65% came from PC product lines, 18% smartphones, tablets and other mobile devices, 14% motherboards, graphics cards and components, and 3% IoT products.

Due to stagnant growth in global demand for smartphones and delays in launching the ZenFone 3-series, Asustek may not reach its target global shipments of 25 million smartphones in 2016, market analysts said. However, Asustek expects 2016 revenues from smartphones to grow on year due to higher ASPs for ZenFone 3 devices, according to company CEO Jerry Shen. Asustek will launch the ZenFone 3 in Taiwan, Hong Kong, Malaysia, Vietnam, Thailand, the Philippines and Indonesia in August 2016, in Japan, the US and Italy in September and in Brazil in October.

For the third quarter of 2016, Asustek expects global brand revenues of NT$100-110 billion, gross margin 12-14% and operating margin 3.75-4.25%. In particular, Asustek expects third-quarter revenues for PCs to increase 10-15% on quarter and remain flat on year, revenues from smartphones and tablets to grow 10-15% on quarter but slip 20% on year, and motherboards and graphics cards to rise 10-15% on quarter and hold flat on year.

Asustek’s board of directors on August decided to acquire a land site of 37,828 square meters (9.35 acres) at NT$7.831 billion. The land is near Asustek’s existing headquarters in a suburban area of Taipei City and will be used to construct office buildings including an R&D center.

Source: Company, compiled by Digitimes, August 2016

Asustek Computer CEO Jerry Shen
Photo: Fu Shih-min, Digitimes, August 2016

Categories: IT + CE Mobile + telecom Mobile devices PC, CE

Tags: 2Q16 Asustek Asustek Computer brand

Companies: Asustek Computer

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