The buyer of Siemens' global mobile phone manufacturing business has suffered a substantial decline in earnings since taking over the business, it revealed in its fourth quarter 2005 financial report this week.
BenQ Corp of Taiwan said it had a net loss of close to $200m in the quarter, dragging its yearly results into the red for the first time since it was formed as a spin off from Taiwan's giant Acer Group four years ago.
The surprise result dragged BenQ's results into the red for the year, and cast doubt on its ability to turn around the new mobile phone properties in the short term.
“The reported net loss was much higher than market expectation although the market has taken into account the impact from acquiring Siemens' mobile division,” Primasia Securities of Taipei said in a research brief.
BenQ had actually been losing money on some entry-level handsets, Primasia reported, citing BenQ management sources. The company also wrote off over $32m in excess inventory after the takeover.
“In our view, as BenQ was not able to narrow Siemens mobile division's deficit in the fourth quarter 2005, the market will take a negative view of BenQ’s operation in 2006,” said Primasia, “we are currently negative on BenQ for its fourth quarter 2005 results and first half 2006 outlook
In related news, Taiwan's government-sponsored Market Intelligence Center yesterday predicted that mobile phone shipments from Taiwanese companies would double this year to 153 million.
The founder of Japan's scandal-hit internet company, Livedoor, has accepted the validity of some of the accounting fraud charges he faces, Japanese media reported today. Separately, a partial rescue package for the ailing company was announced. Citing unnamed prosecution sources, the Japan Times said that Takafumi Horie had not admitted all charges against him, however.
High-flying Livedoor was laid low after a run on its stock sparked by rumours of accounting fraud earlier this year. In a move that brought new hope for the company, key investor Fuji TV said yesterday it would sell its 12.75 per cent stake to Usen Corporation President, Yasuhide Uno, making him the second largest shareholder after Horie.
Uno hopes to ally his company with Livedoor, giving the combined firm a boost in the competitive internet portal market. Uno said he would later transfer the shares from his personal account to his company's.
China's leading desktop and notebook PC maker, Lenovo said today it would lay off 5 per cent of its 21,000 employees as part of a series of measures designed to cut costs by $250m per year.
The company, among the world's top five PC makers, has struggled to absorb IBM's huge, loss-making PC division, which it purchased one year ago in a deal that doubled the Chinese company's size.
Taiwanese memory chip maker, Nanya Technology Corporation, said it would invest $2.56bn in a new DRAM fabrication facility on the island. The company chairman revealed the size of the investment at the ground breaking ceremony for the new plant on Wednesday. Nanya is ranked among the world's top ten DRAM producers.
In related news, Taiwanese technology newspaper, Digitimes reported that the company was considering starting production of the profitable NAND flash memory commonly used in portable media players.
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