Acer Posts Anemic Profit on Currency, Tax Troubles; Misses Earnings
October 22, 2012 4:11 PM
comment(s) - last by
Taiwanese computer maker, once a star, has fallen on dark days
Acer, Inc. (
) was a shining star of the
, but the Taiwanese company enjoyed a tepid 2011 as the ultra-mobile consumer electronics market shifted towards tablets. Unable to sell users' on the merits of the
Iconia line of tablets
, Acer tried to
sacrifice its bottom line for sales
, raising product quality at the expense of margins. This year has proved more of the same -- while Acer has offered compelling product, it continues to languish under poor margins and large losses.
The Asian OEM's build quality push has allowed it to maintain anemic growth in the face of the netbook flop,
like Dell, Inc. (
) and Hewlett-Packard Comp. (
) stumbled. But it wasn't enough to allow Acer to keep pace with regional rivals like Lenovo Group, Ltd. (
) and ASUSTek Computer, Inc. (
) who posted large double-digit growth numbers.
In the third calendar quarter, Acer continued to exhibit poor results, earning a weak T$68M ($2.32M USD) versus the analyst consensus of T$756M ($25.8M USD).
The root cause was interestingly not the past source of issues -- netbook declines and margin struggles. Rather, the company reportedly missed its targets as it was forced to pay a 34 percent effective tax rate, versus its expected 20 percent rate. Acer also reportedly lost T$100M due to currency fluctuations (forex/"foreign exchange").
[Image Source: Boy Genius Report]
The big picture appears to be that Acer has reversed its troubling losses of last year, but is facing new fires, even as it works to put out those that were previously plaguing it.
Acer's Q3 revenue was T$104.4B USD ($3.57B USD), up more than 11 percent from a year ago. But on a 9-month basis Acer's revenue has fallen roughly 5.7 percent from a year ago.
Assuming that Acer is able to get a grip on its new concerns -- tax rates and currency issues -- the holiday season should prove a key test for Acer. The OEM has the opportunity to restore some of its luster by shining in
Windows 8 device sales
. But if its critical decisions -- such as the
choice to forgo Windows RT (ARM) product
-- backfire and sales prove weak, Acer could see its reputation further marred.
This article is over a month old, voting and posting comments is disabled
RE: This is another one of those...
10/23/2012 9:20:31 AM
Lenovo and Apple have excellent hardware. Though the screens on the Lenovo laptops are shite. The tablets use IPS now, finally.
Lenovo was smart. They bought the Thinkpad line from IBM and instead of watering it down to make more money, they improved it a bit. They also added their entry level Lenovo laptops (not Thinkpad brand) to compete with the likes of Acer and HP. Dirt cheap but still better quality than the shite from Acer and HP. Ugh.
"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings
Report: Netbook Loyalists ASUSTek, Acer, and MSI to Bury the Defunct Device
September 7, 2012, 10:42 AM
HP Swallows $8.9B USD Loss, But Analysts Praise Its Revamp Work
August 23, 2012, 3:33 PM
Dell's Last Hope? Company Turns to Windows 8 Amid Plunging Sales
August 22, 2012, 3:00 PM
Acer Criticizes Windows 8 on ARM, Says It's Sticking With Intel for Now
June 4, 2012, 1:42 PM
Acer Embraces Windows 8 with New Tablets, Ultrabooks, and All-in-Ones
June 3, 2012, 11:29 PM
Samsung Sees Decline in Share, Shipments in a Growing Smartphone Market
July 30, 2014, 9:43 AM
UK Drivers Must Now Give Their Cell Phones to Police After a Crash
July 29, 2014, 4:37 PM
Ford to Switch 3,300 Employees from BlackBerries to Apple iPhones by Year's End
July 29, 2014, 2:08 PM
Quick Note: Hilton Hotels to Use Smartphones as Room Keys, for Check-In/Check-Out
July 29, 2014, 12:53 PM
Verizon Wireless to Receive Exclusive "HTC One (M8) for Windows" Smartphone
July 29, 2014, 9:13 AM
Report: Microsoft's Chinese Offices Raided
July 28, 2014, 9:16 PM
Most Popular Articles
Facebook Will Force Android, iOS Users to Use Messenger App This Week
July 29, 2014, 11:26 AM
Sony's Xperia Z3 Gets Detailed in Leaked Photos
July 25, 2014, 2:30 PM
Ford's Extensive Use of Aluminum in '15 F-150 Results in $395 Increase for Base Models
July 28, 2014, 3:02 PM
Report: Apple to Launch 12" Retina MacBook Air, 4K Desktop Product Later this Year
July 24, 2014, 4:33 AM
Pentagon's Priciest Project, F-35, Misses International Debut
July 25, 2014, 10:18 AM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information