Feeds

Merrill Lynch downgrades notebook makers

Cites falling margins, weakening demand

  • alert
  • submit to reddit

Merrill Lynch has further downgraded its performance expectations for the major Taiwanese notebook manufacturers, following indications that they are now anticipating a slowdown in demand for their portable products.

Bearish (at least as far as tech stocks go), ML has lowered its ratings for Quanta, Compal and Wistron, the world's three largest contract manufacturers of notebook PCs. Quanta and Compal stock now carry a 'sell' rating, down from 'neutral' and 'buy', respectively. Wistron has been downgraded from 'buy' to 'neutral', DigiTimes reports.

Compal last week lowered its expectations of worldwide notebook shipments from 47m units to 43-44m. It said gross margins could fall to 5.9 per cent in Q3, down from a record-setting 6.4 per cent in Q2.

Quanta has reportedly trimmed its internal shipment target from 12m to 11m, an 8.3 per cent decline in demand.

ML expects notebook shipments to rise sequentially 10-15 per cent in Q4, so clearly the big dip in demand will come during Q3. Falling prices and rising inventories will keep manufacturers' gross margins down in Q4. ®

Related stories

Taiwan ODMs signal notebook sales slowdown
Wall Street bears take a swipe at chip stocks
Euro notebook sales slowdown signals end of boom
UK PC biz sees best growth for four years
Consumers want widescreen notebooks - analyst
Intel to encourage channel to source notebooks direct
Dell drops out of China's low-end PC market
Dell nabs HP notebook exec

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.