Because of a weak first half in 2014, Pegatron Technology is unlikely to be able to achieve its NT$1 trillion (US$32.61 billion) revenue goal for 2014 despite the fact that the company's revenues in the fourth quarter are expected to rise dramatically thanks to Apple orders for the iPhone 6, according to some market watchers, who added that the maker should be able to achieve the goal in 2015 as it has received Apple's trust and will continue to see increasing orders.
Although Pegatron's consolidated revenues were down 6.8% from a year ago in the third quarter, the maker's gross margin and profits both improved significantly, boosting its EPS to NT$2.03, the highest reported numbers since it spun off from Asustek Computer. In the first three quarters of 2014, Pegatron achieved combined consolidated revenues of NT$667.79 billion, down 2.3% on year, but its net profits grew to NT$12.15 billion and EPS to NT$3.86, up from NT$2.70 a year ago.
As for the fourth quarter, the market watchers expect Pegatron's revenues to grow another 20-30% from the third quarter, which would help the company achieve a new historical high.
However, Pegatron's revenues for 2014 are unlikely to break NT$1 trillion because of weak demand for the iPad mini 2 and the iPhone 5C in the first half of the year, the market watchers noted.
Pegatron also recently announced it will increase its capex for 2015 to US$300 million, up from US$200 million in 2014 and will use the cash to expand capacities at plants in Kunshan and Shanghai, China. The market watchers believe the increasing capacity is meant for Apple's next-generation products for 2015. With Pegatron's chassis subsidiary Casetek also expected to join the iPhone supply chain in 2015, Pegatron's revenues will have a good chance to surpass its current target in 2015.
However, Pegatron's motherboard brand subsidiary ASRock has been performing rather weakly recently, facing fierce competition from Asustek and Gigabyte Technology, and its server motherboard business has just started; therefore, to help ASRock regain its competitiveness will become an important task for Pegatron next year. |