Benq tipped to report profit dip
BENQ, which agreed in June to take over Siemens’s unprofitable mobile phone unit, may report a profit drop for the fourth straight quarter on declining handset shipments and lower monitor prices.
Second-quarter net income probably fell 94 per cent to $168 million ($5.3 million) Taiwan dollars (NT) from $NT2.97 billion a year earlier, according to the median forecast of four analysts.
“Operating margin was affected by a reduced revenue base,” said Steven Tseng, an analyst with Taipei’s Yuanta Core Pacific Securities, which has a hold recommendation on the stock.
Chairman KY. Lee is betting the takeover of Siemens’s unprofitable mobile phone unit will help him achieve his goal of creating a globally recognised brand, increase Benq’s profit and make it the world’s fifth-biggest handset maker.
The Siemens co-branding may also raise the profile of Benq’s other electronics products, such as digital cameras, computers and LCD monitors.
Sales, reported earlier, fell 29 per cent to $NT29.8 billion from a year earlier.
The Taipei-based company had revenue of $NT32.3 billion in the first quarter.
In April, Benq announced that sales would be little changed in the second quarter from the first.
It said then that first-half handset sales would fall from a year earlier because of the company’s “changing customer mix”.
Handset shipments in the first quarter dropped to a million units from 2.9 million in the fourth quarter.
Benq, which says its name is an acronym for “bringing enjoyment and quality to life”, said when the agreement was announced on June 7 that it would more than double revenue with the takeover of the Siemens unit.
The transaction is expected to be completed by the end of September.
Benq raised its forecast for handset shipments this year to more than 15 million from the previous projection of 10 million.
