Management changes, low inventory to help Acer hit Q1 profit

Chairman of Taiwanese PC maker says he is "quite confident" Acer will make profit in first quarter despite likely revenue drop, as management reshuffles and reduced inventory lessen burden on company.

Acer Chairman J.T. Wang is optimistic the company will record a profit in the first quarter of this year, thanks to reduced inventory and key management reshuffles last year.

"I'm quite confident that we will make a profit in the first quarter, although our sales revenue might drop slightly," Wang said at a media briefing, according to a report Monday by Taiwan's Central News Agency.

Wang explained that over the last nine months, the Taiwanese PC maker had put a lot of effort into reducing inventory across its retail channels and collecting accounts receivable--lessening burdens on the company's operation--as well as two major management reshuffles in April and November last year.

However, he was less optimistic about the company's operations and outlook for the second quarter, since the April to June period is typically a slow season for the electronics sector. He added that Microsoft's Windows 8 software will not be launched during the second quarter and, as a result, consumers may delay their PC purchases until the second half of 2012.

On the bright side, Wang noted that due to continued disruption in hard-disk supplies in the first quarter, revenue in the second quarter is expected to be better than the first quarter because of a lower base period. The supply crunch will not ease until third quarter, he said, and added that Acer's notebook shipments were expected to increase steadily from February.

Wang in December said he was banking on ultrabooks to boost the company's financial standings.

The once-dominant Acer met with various hurdles last year. It cut its third-quarter notebook shipment forecast from 6.4 million to 5.4 million units, and according to IDC PC analyst Jay Chou, had a backlog of notebooks in the retail channels which needed to be cleared before new models could be brought in. "They were too optimistic about how many PCs they could sell," he said.

Acer CEO and President Gianfranco Lanci resigned at the end of March last year following a dispute with board members over the company's future growth strategy.

In late-October, Acer made a management reshuffle in Europe which saw its  EMEA (Europe, the Middle East and Africa) president, Walter Deppeler, appointed as chief marketing officer. Acer China President Oliver Ahrens took over the EMEA seat. 

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