Asus suffers first quarterly loss in 19 years

Taiwanese PC maker records a net loss of US$82 million in the fourth quarter of 2008 but expects to improve its margin this quarter, according to reports.
Written by Vivian Yeo, Contributor

Taiwanese PC manufacturer Asustek has announced a fourth quarter 2008 net loss of NT$2.8 billion (US$82 million) but expects its gross margin to climb this quarter, according to reports.

Asus' performance last quarter has resulted in its first quarterly loss since the company was founded in 1989, ChinaTechNews.com reported Monday.

Quoting Asus President Jerry Shen, the Taiwan-based Digitimes attributed the loss to the economic downturn and "misjudgment" including a NT$2.9 billion (US$85 million) loss from inventory. For full-year 2008, Asus had a net profit of NT$16.5 billion (US$482.2 million), down 40 percent year-on-year.

For the whole of 2008, the company shipped 5.8 million notebooks, 4.9 million Eee PCs, 22 million to 23 million motherboards and 6 million graphic cards, Digitimes reported last week.

However, Asus expects notebook shipments this quarter to be halved from last quarter's 1.6 million. Similarly, Eee PC shipments will drop from 1.5 million in the fourth quarter of 2008 to 1 million, while motherboard shipments are expected to only reach 4.5 million to 5 million units.

According to the Web site of China Radio International, Asus expects its revenue to decrease by a further 30 percent this quarter, but is predicting a return to profitability.

Shen said that among other measures to improve its margin, the company's inventory has been lowered from a value equivalent to 63 days at the end of last year to 55 days in January, Digitimes reported. Asus intends to lower this further to 45 days by the end of March.

According to IDC's PC shipment growth figures released in January, Asus registered a 34.5 percent year-on-year jump for 2008 to rank fifth in the Asia-Pacific region. The research analyst noted that the region's PC shipments last year declined 5 percent compared to that in 2007.

When contacted, Asus' Singapore office was unable to provide a statement on the company's fourth quarter and full-year 2008 performance.

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