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Acer shares up on Q2 results
Central News Agency
2014-08-08 12:14 PM
Taipei, Aug. 8 (CNA) Shares of computer maker Acer Inc. moved higher Friday morning after the company reported a significant improvement in its second quarter results at a time when the global PC business is on the way to recovery, dealers said. Many investors have embraced high hopes that Acer's growth momentum will continue into the third quarter, a traditional peak season for the PC industry, they said. As of 11:03 a.m., shares of Acer had added 2.91 percent to NT$24.75 (US$0.83) with 4.56 million shares changing hands. The weighted index on the Taiwan Stock Exchange (TWSE) was down 0.98 percent at 9,041.90 points. "While the broader market kept trending lower this morning, investors tended to look for buying targets like Acer, which has come up with positive leads, as a safe haven to park their funds," Ta Ching Securities analyst Andy Hsu said. In a statement released Thursday, Acer said that it posted NT$485 million in net profit for the second quarter of this year, jumping from a meager NT$1 million in net profit recorded in the previous quarter. Its second quarter earnings per share stood at NT$0.18. The April-June period was the second consecutive quarter for Acer to post a net profit. In the fourth quarter of last year, Acer suffered a net loss of NT$2.78 per share. "The second quarter's EPS beat an earlier market expectation of NT$0.17 as Acer has tried hard to adjust its product portfolio by adding devices which command a higher profit margin to boost the bottom line," Hsu said, referring to popular all-in-one PC models and hybrid notebook computers. In addition, Hsu said Acer's efforts to rein in its marketing expenses to cut operating costs also paid off in strengthening its profitability. According to the PC vendor, its operating margin rose to 0.81 percent in the April-June period from 0.17 percent recorded in the first quarter. The second quarter figure was the highest level since the second quarter of 2011. Hsu said that as the global PC industry is hitting a turnaround this year on waves of replacements due to Microsoft's end of support for Window XP, Acer is expected to continue to benefit from such an uptrend. "Now that the PC business is in its peak season, I expect Acer will report a better bottom line for the third quarter," Hsu said. Market analysts have anticipated that the PC vendor will rake in NT$0.35-0.38 in EPS. Hsu said foreign institutional investors have started to pick up Acer shares in recent sessions by taking advantage of its relatively low valuation. According to the TWSE, foreign institutional investors served as net buyers of 5.05 million Acer shares Thursday, the third largest net foreign buying amount among the stocks on the main board. In a research note, BNP Paribas said it has upgraded a recommendation on Acer shares to "overweight" from "underweight." It issued a target price of NT$32 on the stock. The brokerage said Acer's global share will rise to 11.1 percent in 2014 from 10.4 percent recorded in 2013. (By Lo Hsiu-wen and Frances Huang)
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