AcerIt may be the second largest computer manufacturer in the world, but things are not looking good for Acer. The Taiwanese company lost 6.79 billion New Taiwan Dollars (TWD), about $234.1 million, in Q2, far more than the already sizable anticipated shortfall of 3.3 billion TWD (around $114.7 million). That's a dramatic drop off from the 1.19 billion TWD profit the company posted in Q1. Things are expected to improve in Q3, but Acer still expects to operating in the red until at least Q4. Some of the problems can be blamed on recent restructuring that has the vendor increasingly focused on mobile devices and less on netbooks, which were successful for the company but have quickly declined in popularity. The extremely brief PR can be found after the break.
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Acer Inc. Q2 2011 preliminary financial results:
operating loss NT$7.1B (US$246M), PAT -NT$6.8B (-US$236M), EPS -NT$2.57

TAIPEI, TAIWAN (August 24, 2011) – Acer Inc. announces the preliminary financial results for Q2 2011. Consolidated revenue was NT$102.1B (US$3.5B), down 32% year-on-year (YOY), operating loss was NT$7.1B (US$246M), profit after tax (PAT) was -NT$6.8B (-US$236M) and earnings per share (EPS) was -NT$2.57. The Q2 loss accounts for US$150 million in sales allowance to clear channel inventory in EMEA, US$30 million for cost of EMEA reorganization, inventory clear-up due to sluggish economic situation, and senior executive severance pay.

For first half (1H) 2011 preliminary results, Acer's consolidated revenue was NT$229.9B (US$8.0B), declining 26% YOY. Operating loss was NT$5.2B (US$179M) due to unfavorable internal and external impacts on company in Q2. PAT was -NT$5.6B (-US$195M) and EPS was -NT$2.12.

Under a new strategy, Acer's business model is changing from monitoring product sell-in only to include the final product sell-through, which means to keep closer watch on the market end for better total inventory control. In Q2 Acer made efforts to further downsize channel inventory due to stagnant European and US economies, and the slow PC market. Additionally, the company paid considerably in senior executive severance pay. Consequently, Acer suffered higher than expected loss in Q2.

In Q3 2011, Acer expects revenue growth and improved gross margin quarter-on-quarter (QOQ). As for Q4 2011, Acer anticipates a stable business operation and better gross margin from Q3.

Notes:
The exchange rate was US$1: NT$28.802.
Acer Inc. consolidated revenue includes revenues from other companies in which Acer Inc. has 50% or more ownership, and already deducts any revenues between Acer Inc. and these companies to avoid double-counting.

About Acer
Since its founding in 1976, Acer has achieved the goal of breaking the barriers between people and technology. Globally, Acer ranks No. 2 for total PCs and notebooks. A profitable and sustainable Channel Business Model is instrumental to the company's continuing growth, while its multi-brand approach effectively integrates Acer, Gateway, Packard Bell, and eMachines brands in worldwide markets. Acer strives to design environmentally friendly products and establish a green supply chain through collaboration with suppliers. Acer is proud to be a Worldwide Partner of the Olympic Movement, including the Vancouver 2010 Olympic Winter Games and London 2012 Olympic Games. The Acer Group employs 8,000 people worldwide. Revenues for 2010 reached US$19.9 billion. See www.acer-group.com for more information.
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