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Misery at Acer: 'Breaking even this year is impossible'

Pile 'em high and, well, leave 'em there for now

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Acer has announced its first-ever quarterly loss as a veritable vortex of inventory backlogs, internal reshuffling, sluggish PC demand and runaway iPad popularity chewed through its profits.

The Taiwanese firm's Q2 loss after tax was NT$6.8bn ($236m), according to its preliminary results, which came from "$150m in sales allowance to clear channel inventory in EMEA, $30m for cost of EMEA reorganisation, inventory clear-up due to sluggish economic situation, and senior executive severance pay".

The troubles started for netbook giant Acer with the arrival and subsequent soaring popularity of tablets, particularly the iPad. Falling revenues prompted the acrimonious departure of its CEO Gianfranco Lanci in March this year, after he disagreed with the board over the future direction of the company.

Acer's chairman, JT Wang, who took over from Lanci, said at the time that the firm would be "stepping into the new mobile device market, where we will invest cautiously and aim to become one of the leading players".

So far the strategy has yet to pay off, as Wang told an investor conference today that the worsening environment in Europe and the ongoing efforts at restructuring would continue to cost the company this year, according to Reuters.

"Today I have to say – trying to break even this year becomes impossible," Wang said.

Here in the UK, the firm is doing particularly badly, with shipments falling 45 per cent, pushing Acer into the number three spot in the UK market behind HP and Dell, according to Gartner. ®

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