Taiwanese-based PC and netbook maker Acer released its preliminary second quarter results today, and they’re much, much worse than expected.
The company reported a net loss of $236 million and a 32 percent decline in sales from last year, its first such quarterly loss since 2001, Bloomberg notes.
The first half of the year is a write-off, with a combined first and second quarter operating loss of $179 million.
Worse, although the release said “Acer expects revenue growth” in the third and fourth quarters, it doesn’t anticipate posting a profit this year, or even breaking even, The Wall Street Journal reports (paywall).
The situation is a far cry from analysts’ worst fears of a $128 million dollar loss and an abrupt reversal of fortune from last year, when Acer posted record profits. (Not to mention the past 3 years of solid profits, since it acquired PC maker Gateway in 2007).
Who or what’s to blame? Acer says the loss is a result “inventory clear-up due to the sluggish economic situation, and senior executive severance pay.” Basically, Acer is defending selling off its supply chain and ousting its CEO, costly measures it hopes will eventually improve the bottom line and reposition the company going forward.
But in so doing, Acer is also tacitly acknowledging a reality that TPM pointed out Tuesday in the midst of the news of China overtaking the U.S. as the largest PC market: PC sales around the globe are slowing, especially netbook sales, as consumers flock to tablets. Acer is attempting to compete in this new market with its own tablets, but of course, the iPad already has a formidable lead, followed by Android tablets.
