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Notebook computer stocks up on Intel's results, forecast
Central News Agency
2014-07-16 12:36 PM
Taipei, July 16 (CNA) Taiwanese notebook computer stocks generally moved higher Wednesday morning after U.S.-based chip giant Intel Corp. reported better-than-expected results for the second quarter as the global personal computer market gained strength, dealers said. Because of the PC market's recovery, Intel also gave better-than-expected sales guidance for the third quarter, further boosting notebook vendors' shares, they said. Buying rotated to downstream notebook computer stocks because of their relatively low valuations, dealers said, as upstream electronics companies, such as semiconductor stocks, had become relatively expensive after posting significant gains in recent sessions. As of 12:05 a.m., shares of Compal Electronics Inc., one of Taiwan's leading notebook computer ODM services providers, had added 5.29 percent to NT$28.85 (US$0.96), and shares of rival Wistron Corp. had risen 1.50 percent to NT$30.55. Shares of Acer Inc., a leading Taiwanese PC vendor, had gained 3.40 percent to NT$22.80. These notebook computer stocks were outperforming the broader market. The market's benchmark weighted index was down 0.74 percent at 9,498.14. "Intel's second quarter results and third quarter forecast sparked gains in these notebook computer stocks as sentiment toward the global PC market has gotten better," MasterLink Securities analyst Tom Tang said. Intel announced that its second quarter sales rose 8 percent from a year earlier to US$13.8 billion and that its earnings per share stood at US$0.55. The market had expected Intel's second quarter sales to come in at US$13.7 billion, with an EPS of US$0.52. Intel said the better-than-expected second quarter results reflected a rebound in the global PC market. The comments echoed a recent report by International Data Corp., which said worldwide PC shipments in the second quarter fell only 1.7 percent year-on-year, compared with a forecast of a 7.1 percent decline, because of the high replacement rate of outdated models. With the global PC market recovering, Intel projected third quarter sales of US$14.4 billion, plus or minus US$500 million. The market had expected Intel to give sales guidance of US$14.1 billion. "Along with Intel's upbeat forecast, the improving global PC market encouraged investors to buy into major notebook stocks soon after the local bourse opened," Tang said. The June sales data of some heavyweights, such as Compal, had already given indications that the market was rebounding from an extended stretch of declining sales. Compal posted NT$76.71 billion in consolidated sales in June, up 12.8 percent from the previous month and up 34.6 percent year-on-year. It shipped 4.4 million notebook computers during the month. The June sales were Compal's highest monthly total in 44 months and also the highest among Taiwan-based contract notebook computer makers. "The current buying in these notebook computer stocks also indicates that many investors have high hopes that these stocks will benefit from peak season effects in the second half of the year," Tang said. "That's why buying rotated into the downstream electronics segment as investors aimed to take advantage of the segment's relatively low valuations compared with upstream electronics stocks," he said. Tang said further bargain hunting in notebook computer stocks could continue until these companies release their second quarter results before Aug. 15. (By Frances Huang)
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