Pegatron sees growth in July revenues; announces profits for 2Q14
Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Tuesday 12 August 2014]

Pegatron Technology has announced consolidated revenues of NT$67.3 billion (US$2.24 billion) for July, down 6.69% on month and 1.67% on year, while the company also unveiled net profits of NT$2.48 billion for the second quarter and EPS of NT$0.65.

The company’s net profits were NT$5.97 billion for the first half, up 14.4% on year and EPS were NT$1.82.

Pegatron’s revenues are expected to grow 20-30% sequentially in the third quarter thanks to orders for new iPhones and games consoles, which will help cover the gap from its dropping notebook orders, market watchers noted.

Pegatron CFO Charles Lin pointed out that Pegatron’s gross margins rose from 5.2% previously to 6.1% in the second quarter mainly due to a product mix change and improvements in operating efficiency. However, the drop in second-quarter net profits was due to losses in currency exchanges and Euro-convertible bonds (ECB).

Pegatron had exchange rate losses of about NT$750 million in the first half. The first quarter saw the devaluation of the Chinese Yuan (CNY) and the second quarter was saw an appreciation of the New Taiwan Dollar (NT$). The company’s ECBs issued in the first half also impacted EPS performance by NT$1.

As for the performance of each product line, Pegatron’s IT product lines including notebooks, desktops and motherboards, contributed 30% of second-quarter revenues, down 6% sequentially and 27% on year; consumer electronics product lines contributed 20%, down 3% sequentially and 17% on year; communication product lines contributed 39%, flat sequentially and up 63% on year; and others including investments and vertical integration, contributed 11%.

For notebook orders, Pegatron is now more aggressively landing short-term orders for the second half, and regular orders for 2015 and expects a sequential decline of 5-10% in third-quarter notebook shipments. The company’s motherboard and desktop shipments are expected to stay flat or drop within 5%, according to company CEO Jason Cheng.

Pegatron shipped 2.5 million notebooks in the second quarter and 5.2 million units in the first half and expects to ship at least 10 million notebooks in 2014. Pegatron shipped 13.8 million notebooks in 2013. The company shipped 1.8 million motherboards and desktops together in the second quarter and 3.6 million units in the first half, a decline compared to the 4.8 million units shipped in the first half of 2013, Cheng said.

Cheng also expects shortages of notebook components such as panels and DRAM in the second half as component makers placed most of their focus on mobile devices and may need to some time to shift back their production.

Pegatron: Consolidated revenues, Jul 2013 - Jul 2014 (NT$m)

Pegatron: Consolidated revenues, Jul 2013 – Jul 2014 (NT$m)

Month

Sales

M/M

Y/Y

YTD

Y/Y

Jul-14

67,300

(6.7%)

(23.9%)

495,676

(1.4%)

Jun-14

72,123

9.5%

1.5%

428,376

(0.3%)

May-14

65,889

(9.1%)

(8.6%)

356,253

(0.7%)

Apr-14

72,476

6.7%

4.8%

290,363

1.3%

Mar-14

67,901

16.1%

11.3%

217,888

0.1%

Feb-14

58,463

(36.1%)

(14.6%)

149,987

(4.2%)

Jan-14

91,525

3.5%

3.9%

91,525

3.9%

Dec-13

88,392

(2.3%)

1.2%

950,545

7.9%

Nov-13

90,433

0.5%

(3.8%)

862,153

8.6%

Oct-13

89,996

(23%)

5%

771,720

10.3%

Sep-13

116,860

75.5%

45.6%

681,724

11%

Aug-13

66,606

(2.7%)

(4.2%)

564,865

5.8%

Jul-13

68,443

(3.7%)

(11.5%)

498,258

(76.6%)

*Figures are consolidated
Source: TSE, compiled by Digitimes, August 2014

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