Pegatron enjoys strong profits in 3Q19
Sammi Huang, Taipei; Joseph Tsai, DIGITIMES

Pegatron has reported third-quarter consolidated revenues picked up 18.5% sequentially and 10.2% on year to come to NT$354.8 billion (US$11.58 billion), while the gross margin was around 3.8% with net profit reaching NT$6.3 billion, up 18.7% on quarter and 122.5% on year.

Pegatron generated a total of NT$948.3 in consolidated revenues for the first three quarters of 2019 with gross margin reaching around 3.2% and net profit NT$11.09 billion, up 41.4% on year.

For October, Pegatron registered consolidated revenues of NT$147.09 billion, down 6.7% on month and 20.9% on year.

The commercialization of 5G technology will make a positive contribution to Pegatron's sales of mobile devices, game consoles and smart home related products in 2020, according to company president and CEO SJ Liao.

Liao expects Pegatron's communication product business to continue benefiting from clients' strong order pull-ins in the fourth quarter and will perform better than in the third. However, the business' sales will dip on year due to the high comparison base in the fourth quarter of 2018.

Pegatron's notebook shipments are expected to slip 10-15% sequentially in the fourth quarter, but will grow 10-15% on year for the whole-year 2019. The desktop and motherboard shipments will also see a 15-20% sequential decline in the fourth quarter, but will stay flat on year for 2019. All other Pegatron product lines will see flat results on-quarter, but on-year declines in the fourth quarter.

Expecting the US to impose a tariff on notebooks imported from China starting in mid-December, most vendors were keen in pre-stocking extra inventory in the third quarter. Digitimes Research expects global notebook shipments to increase nearly 2% sequentially in the third quarter, but drop 1.8% on quarter in the fourth due to vendors' high inventory level and Intel's CPU shortages.

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