Acer reports first-ever quarterly loss

By on August 25, 2011, 10:30 AM

Taiwanese PC maker Acer has reported its first-ever quarterly loss and chairman J.T. Wang says it will be impossible for the company to break even this year. Several factors led to poor performance this year, reports Reuters.

Acer posted a loss of 6.7 billion Taiwan dollars ($234.3 million) for the quarter ending in June. This is in contrast to a 2.65 billion Taiwan dollars net profit for the same period last year. Sales reportedly fell 32 percent from a year ago.

Wang told investors that the second quarter loss was a correction period and explained that the company was clearing up excessive inventory. $30 million went to pay for reorganization. Acer overestimated the demand for notebook PCs in the second quarter and ultimately had to clear out inventory of unsold units, costing roughly $150 million.

Acer also made multiple severance payments to high level management that left the company. One such resignation was Gianfranco Lanci, Acer’s former CEO who exited in March over strategy disagreements.

The company also cites restructuring as another reason for the downturn. Acer has been focusing on the ever-popular mobile market, which likely means smartphones and tablets. 

The second largest PC vendor in the world is seeing profits dip as a result of the recent tablet fever, although Wang believes this trend will soon recede and notebooks will regain consumer interest. A third quarter loss is still expected, although it won’t be as bad as the second quarter.

Acer shares were down 2.9 percent ahead of the announcement, with broader market shares down 0.6 percent.

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