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Top Taiwanese firms forecast dropping demand

Tech earnings this quarter have been a mixed bag.  Apple, Inc. (AAPL), a perennial performer, shockingly fell short of predictions, leading a handful of analysts to downgrade its stock.  On the other hand, Apple's arch-rival Samsung Electronics Comp., Ltd. (SEO:005930) did better than expected lead by world-leading shipments of smartphones.

More earnings reports trickled in on Monday from Taiwan, and the overall message was consistent -- while sales were strong in Q3 2011, demand and price concerns for Q4 2011 have lead to outlook downgrades across the board.

Here's a handful of what arrived...

ASUSTEK Computer, Inc. (TPE:2357)
[Source]

Eee Pad Transformer
[Image Source: Android In]

Business segment:
laptop, netbook, tablet, and smartphone OEM
Revenue:
NT$96.347B ($3.22B USD)
Profit:
NT$4.68B ($157M USD) 
6.4% better than consensus; 9.4% down from Q3 2010, 30% up from Q2 2011
Units Shipped:
4.3 m laptops
1.3 m netbooks
630 k tablets
Q4 Outlook
4.1 m laptops
1.2 m netbooks
600 k tablets

Comments:
ASUSTek surprised with better than expected earnings.  However, the bad side of the news is that it forsees weakening demand in Q4.  It's no secret that the netbook market is drying up, but modest tablet sales (driven by the company's Android ASUS Transformer) for ASUSTek indicate that the company should survive that transition without major issues.  Supply issues remain a problem for ASUSTek, though, and are hindering tablet sales.

HTC Corp. (TPE:2498)
[Source]

Evo 3D and HTC Flyer
[Image Source: Google Images]

Business segment:
tablet, smartphone OEM
Revenue:
NT$135.82B ($4.55B USD)
0.5% lower than consensus
Profit:
NT$18.7B ($626M USD)
Units Shipped:
13.2 m "units" (tablets+smartphones)
Q4 Outlook
NT$125B-$135B ($4.19B-$4.52B USD)
9.0-15.7% lower than consensus
12-13 m units shipped

Comments:
Like ASUSTek, HTC predicted a relatively weak Q4.  Unlike ASUSTek, HTC disappointed in sales in the current quarter.  HTC has established itself as a top tier Android handset manufacturer, but it's struggling to break through to the next level -- vying with Apple and Samsung for the global sales lead.  It's also struggling to gain tablet market share.  And to top things off, HTC lost its request for a preliminary injunction against Apple's iPad and iPhone.  If the U.S. International Trade Commission decides to ban imports of HTC's smartphones and tablets as Apple is requesting, HTC now has much less bargaining room, as a result.

Hon Hai Precision Industry Co Ltd. (owner of Foxconn) (TPE:2317)
[Source]

Foxconn Workers
[Image Source: Telegraph UK]
 
Business segment:
gaming console, tablet, smartphone, mp3 player, laptop, desktop, and computer component ODM
Revenue:
NT$665.66B ($22.29B USD)
0.2% increase from Q3 2010
Profit:
NT$19.2B ($643M USD)
8.6% less than Q3 2010, 6.67% better than analyst consensus
Outlook:
not available

Comments:
Clearly Hon Hai's Foxconn unit's revenue was expected to be hurt by lower than expected shipments from its biggest smartphone customer -- Apple.  However, the company still managed to beat profitability expectations.  Virtually all electronics companies in the industry rely on Foxconn for some of their product manufacturing needs, so the company is somewhat of a barometer for the market in general.  The company is moving aggressively to replace volatile [1][2][3] and increasingly expensive Chinese labor with reliable robots.  It's also looking to migrate factories to Brazila and Inner China -- regions where costs remain relatively low.

Sources: ASUSTek, HTC, Hon Hai



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RE: Wisdom is dead.
By Master Kenobi (blog) on 10/31/2011 2:18:02 PM , Rating: 2
True. The U.S. is on a downward spiral at this point and it remains to be seen how far down it will go before we correct it, or implode. Either way we really screwed the pooch by not moving to automation sooner.


RE: Wisdom is dead.
By YashBudini on 11/1/2011 3:17:36 PM , Rating: 2
quote:
The U.S. is on a downward spiral at this point and it remains to be seen how far down it will go before we correct it, or implode.

This contradicts Jason's claims. How can that be?

It would be rather deserving if US corporations going "global" suddenly conclude there isn't going to the the massive middle class development in China they had hoped for. And good luck selling Coke, Pepsi, Big Macs, Marlboros, and Budweisers to those who will be lower tier than the robots that replace them. But since we as people are now officially 2nd class citizens to corporations (nice move Supreme Court) why shouldn't they also be 2nd class citizens? That's what you get for following the leader.


"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home














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