Acer Inc. (2353), Taiwan’s second-largest computer maker, plunged to a 12-year low in Taipei trading after announcing a record loss, job cuts and the resignation of J.T. Wang as chief executive officer.
Shares fell 6.9 percent, the daily limit, to NT$16.90 as of 11:31 a.m., the lowest since October 2001. Acer posted a net loss of NT$13.1 billion ($445 million) in the three months ended Sept. 30, compared with analyst estimates for a NT$59 million loss, after writedowns of five acquisitions including Gateway Inc. and iGware Inc., it said yesterday.
Demand for personal computers has slumped globally as consumers shift to mobile devices including tablets produced by Samsung Electronics Co. (005930) and Apple Inc. (AAPL:US) Wang, who in early 2010 predicted the company would overtake Hewlett-Packard Co. (HPQ:US) as the biggest maker, will be replaced by President Jim Wong from Jan. 1 with founder Stan Shih to lead a committee to propose strategic changes.
“We believe earnings will get worse before they get better due to our outlook for weakness for the PC industry,” Kirk Yang, an analyst at Barclays Plc in Hong Kong, said in a report today as he cut the stock to underweight from equalweight. “We would not be surprised to see the company making more senior management changes.”
Acer’s loss comes as HTC Corp. (2498), the largest smartphone maker in Taiwan, forecast worse-than-expected fourth-quarter sales amid weak demand for its One max handset. Sales will be NT$40 billion to NT$45 billion, trailing the NT$52.2 billion average of 21 analysts’ estimates compiled by Bloomberg.
Of the 30 analysts tracked by Bloomberg, zero recommend buying Acer stock and 19 rate it a sell. There are 11 holds.
The loss spurred Acer to announce a 7 percent cut in its global workforce and plans to issue 136 million new shares. The restructuring will result in a one-time cost of $150 million this quarter, it said.
J.T. Wang will retain the chairman’s role at Acer until June, the company said.
Fourth-quarter mobile device shipments at Acer may fall about 10 percent from the third quarter, Henry Wang, a spokesman for Acer, said today in a briefing at the Taiwan stock exchange.
The introduction of tablet devices, such as Apple’s iPad, and the failure of new versions of Microsoft Corp.’s Windows operating system to drive demand has pushed PC sales lower. Industry shipments dropped 11.4 percent in the second quarter from a year earlier, according to Bloomberg Industries data.
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