Quanta Computer has reported its financial results for the third quarter with consolidated revenues growing 9.9% sequentially and 12.9% on year to reach NT$275.9 billion (US$8.44 billion). Its gross margins stood at 4.27%, with operating profits increasing 1.4% sequentially to reach NT$4.52 billion. EPS for the quarter was NT$1.51.

Quanta shipped 11.6 million notebooks in the third quarter, but notebook shipments are expected to drop by less than 5% sequentially in the fourth because of weak global demand. The company also expects its notebook shipments to stay flat or drop slightly on year in 2016.

During the third quarter, Quanta generated profits of NT$2.3 billion from currency exchanges, up significantly from NT$455 million of the previous quarter, boosting the company's net profits by 72.8% sequentially to NT$5.83 billion.

The company's net profits for the first three quarters of 2015 were NT$12.88 billion, and EPS came to NT$3.34. Gross margins for the period stood at 4.5%.

Commenting on market watchers' questions over the Apple Watch, Quanta vice chairman CC Leung, without naming the client or product, only said that its wearable device shipments will grow dramatically in 2015 and the growth will continue in 2016, standing a chance of even doubling the 2015 volume. As for the market rumor that Apple is planning to release the Apple Watch 2 at the end of the second quarter 2016, Quanta declined to comment.

So far, Quanta only spent NT$3.5 billion out of its estimated NT$5 billion capex for 2015 and the company will continue to invest the rest to expand its capacity by the end of 2015. Although Quanta did not specify what product lines it plans to expand, market watchers believe the primary target will be the Apple Watch.

As for the cloud computing industry, company chairman Barry Lam pointed out that the industry is growing competitive, but the industry still has much room for development. Quanta is currently a supplier of the four major Internet service providers worldwide - Google, Facebook, Microsoft and Amazon - and is also supplying products to small-and-medium-size cloud computing firms.

Lam noted that Quanta is developing cloud computing-related applications such as Internet of things (IoT), high-performance computing and smart car. Since many clients are looking to launch high-performance computing-based devices for medical, social security and technology R&D industries, Quanta has been preparing to enter mass production for some of these devices in 2016 and 2017.