Acer slashes forecasts, cites weak PC demand

Acer slashes forecasts, cites weak PC demand

Taiwan-based PC vendor Acer recently slashed its profit and revenue forecasts for the full year 2000, citing weakening global PC demand.

Acer now expects to report after-tax profit of between $NT7.9 billion ($US246 million) and $8.1 billion for the whole of 2000, down from a previous forecast of $12 billion, the company said in a statement.

Revenue is expected to be in the $105 to $110 billion range, compared to the $150 billion the company had projected earlier.

Acer cited slowing global PC demand and lower-than-expected shipment volumes of PCs manufactured for other vendors as reasons for the lowered expectations.

In September, Acer Group chairman and chief executive officer Stan Shih said the company had lost an estimated $20 billion in revenue due to a sudden cancellation of a major contract, in a thinly veiled reference to IBM, for which Acer manufactures PCs on a contract basis. The shortfall was largely due to IBM pulling its Aptiva PCs from US retail shelves.

Acer is not the first major PC vendor to blame its financial woes on weakening PC demand. Dell Computer and processor giant Intel have also recently warned of weakening demand, particularly in Europe.

Acer is the core PC-making company of Acer Group, which in 1999 had overall revenue of $US8.4 billion.

At the end of Monday's trading on the Taiwan Stock Exchange, Acer's shares were selling at $27.10 each, down $0.90 on the day. Acer's stock is down sharply from a year-to-date high of $80.

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