Acer Cuts 2012 Shipment Growth Forecast; Weak Global Economy Weighs
By Lorraine Luk
TAIPEI--Taiwanese personal computer maker Acer Inc. (2353.TW) said Friday it revised down its 2012 growth forecast for total shipments including notebooks, tablets and smartphones as the euro-zone debt crisis and global economic uncertainties weigh on consumer demand.
The revised guidance mirrors the poor outlook in the broader PC industry. Global shipments for PCs fell 0.1% in the second quarter, Gartner Inc. (IT) and International Data Corp. said earlier this week, despite heavy marketing by Intel Corp. (INTC) and PC hardware makers to push for a new breed of sleek notebook computers called Ultrabooks. The results were a seventh consecutive quarter of flat or single-digit growth for the industry, Gartner added, underscoring weak demand amid economic uncertainties.
To compound the woes of PC makers, stiff competition from Apple Inc.'s (AAPL) iPad and other tablets has resulted in many consumers switching to such devices for Internet browsing and computing.
Acer said it now expects full-year shipment growth to be between flat and up to 5%, compared to its previous forecast of up to 10%.
The world's fourth-largest PC maker by shipments also said it expects third-quarter shipment growth to be between flat and up to 5% from the second quarter, without giving more details.
Acer's smaller rival, Asustek Computer Inc. (2357.TW), revised down its second-quarter revenue guidance last month as the euro-zone crisis continues to hurt its business in a region that accounts for about one-third of its revenue.
Analysts say the uncertainties over demand are set to persist in the second half given the weakening global economic outlook and overcrowded product launch schedule for the holiday season.
Acer's fundamentals could worsen and it may incur losses due to "razor-thin" operating margins, Credit Suisse analyst Thompson Wu said in a report Friday.
Mr. Wu trimmed Acer's price target to NT$25.00 from NT$28.00 after revising down its 2012-13 earnings per share forecast by 9%-42% to factor in weak demand and changes in pricing and product mix.
