Acer Posts Record $685 Million Loss After Making Further Write Offs

January 19, 2014 Leave a comment

Acer Posts Record Loss After Making Further Write Offs

(Corrects CFO’s name in fourth paragraph.)

Acer Inc. (2353) posted a record annual loss after falling sales and asset write-offs prompted the Taiwanese personal computer maker to change its leadership. The net loss was NT$20.6 billion ($685 million) in 2013, the Taipei-based company said in a statement today, wider than the NT$15.1 billion average of 25 analysts’ estimates compiled by Bloomberg.President and Chief Executive Officer Jason Chen, who took office this month, plans to rebuild the company into a hardware, software and services provider, he told reporters Jan. 13. Founder Stan Shih, 69, in November returned as chairman at the company he started after declining market share and losses at Acer led to the departure of J.T. Wang, the man who replaced him more than a decade ago.

Acer cut its senior executives’ pay by 30 percent, it said in the statement. The company has ample cash and expects losses to narrow sequentially, Chief Financial Officer Eva Ho said at a briefing in Taipei today.

Acer wrote down the value of past acquisitions in the third quarter, and made a further write down of NT$1.3 billion on raw materials and other items for the fourth quarter, it said. Its fourth-quarter operating loss of NT$8.22 billion was wider than the NT$2.2 billion average of analyst estimates, while net loss of NT$7.63 billion was more than double the NT$3.28 billion average of estimates.

The company’s biggest mistake was to invest too early in Ultrabooks — thin, light notebooks promoted by Intel Corp. and mimicking Apple Inc.’s MacBook Air, Chen said earlier this week.

“Acer acknowledges missteps in the past on resource allocation, and the over expectation of Ultrabooks and notebooks with touch panel,” the company said today. “Although the products were leading in design they did not accurately fulfill market needs.”

Chen, who previously worked at custom chipmaker Taiwan Semiconductor Manufacturing Co., said Jan. 13 he plans to rebuild the company starting with its core strength in hardware.

To contact the reporters on this story: Yu-Huay Sun in Taipei at ysun7@bloomberg.net; Tim Culpan in Taipei at tculpan1@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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