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Acer made less than £1m profits in Q1 as forex rates bit hard

Falling PC shipments hit Taiwanese firm's bottom line

Ailing Acer – one of the PC makers considered at risk of vendor consolidation – has made an inauspicious start to calendar year 2016 as sales and profits tumbled.

The Taiwanese business today reported revenues of NT$56.32bn (£1.19bn) for the three months ended 31 March, down 17.1 per cent on the prior year’s stats.

It didn’t explain the top line slippage, but then again it didn’t need to – Gartner bean counters said global PC shipments in the quarter fell 11.5 per cent. Consumers and businesses are spending fewer pounds on traditional desktops and notebooks.

In EMEA, where Acer still ranks among the top five biggest sellers of PCs, its fall from grace was more public – down 26.4 per cent year-on-year to 1.5 million boxes.

Operating income went up 54 per cent to NT$866m, despite the shrinking turnover. “The results reflect Acer’s effective product strategy according to regional market needs and inventory management,” according to a canned statement from the firm.

But the strength of the Taiwanese dollar severely dented the PC firm’s net profit, which fell 73 per cent year-on-year to NT$46m (£974,765). Some industry execs wouldn’t get out of bed for that level of personal profit.

This would seem to be an important year for perennially shape shifting Acer, which recently split itself into two divisions: PCs, servers, tabs and monitors under one roof; and cloud services, smartphones and wearables under another.

The traditional PC market – which accounts for more than 60 per cent of Acer's sales – is forecast to decline while HP, Dell and Lenovo are expected to continue mopping up more and more market share.

There will be nowhere to hide for those not shifting huge volumes this year, and even those that are might find commercial life hard going. ®

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