Acer's first-half net profit falls 85 percent

Taiwanese PC and electronics device manufacturer Acer Inc. has seen its revenues take a beating with a drop of about 35 percent in the first half of this year compared to the same period last year, an Acer biannual report said.

Revenues stood at US$1.04 billion in the first half of 2001 as opposed to $1.6 billion in the same period last year. Net profit saw an even sharper plunge from $23.7 million this year, down from $164 million in 2000 -- a dip of 85 percent, the report added.

"All PC vendors are going to be hurting this year," said Manny Lopez, an International Data Corp. (IDC) market analyst based in Hong Kong, adding that Acer is in pain due to the saturated U.S. and European markets, which are its largest markets.

Lopez noted that while the Asia-Pacific region was also affected with tumbling sales in the first half of 2001, the region's revenue dip was not as harsh due to the large Chinese market and the support of its Taiwan buyers. "Forty-eight percent of Acer Asia-Pacific sales come from China and Taiwan," he said. "China is just a big market for everyone and Acer is a hometown favorite in Taiwan."

Citing the continued decay of the global PC market as the cause of its declining revenues, Acer aims to reduce losses rather than increase revenues and plans to deliver results by the fourth quarter of this year, said Acer Chief Financial Officer (CFO) Philip Peng.

Acer is also hoping to increase sales with Acer Laboratories Inc. (ALi) unveiling a new chipset for Intel Corp.'s Pentium 4 processor that uses DDR SDRAM (Double Data Rate Synchronous Dynamic Random Access Memory).

According to IDC's Lopez, most PC vendors are banking on 2002 to be the light at the end of the tunnel -- all are hoping that the worldwide PC markets will have bottomed out by then and that the U.S.economy will have picked up the pace.

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Stephanie Sim

Computerworld

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