Acer results not up to scratch

By Staff and wire reports

TAIPEI, Taiwan -- Acer posted disappointing results on Monday with sales plunging 35 percent in June from the same period last year.

Taiwan's top PC manufacturer said June sales were knocked down to $175.2 million from $271 million in June 2000.

Despite the gloomy earnings report, Acer's new spin-off contract PC unit announced a bullish sales projection of $6 billion in three years time.

Surviving the slump

Acer's accumulated sales for the January-June period dropped to $1.04 billion down 35.27 percent from $1.6 billion in the corresponding period a year earlier.

Last month, Acer announced plans to spin off its contract or original equipment manufacturing (OEM) unit to survive the global slump in PC sales.

Acer chairman Stan Shih said a similar strategy had paid off for Acer's rivals.

"Our competition has gradually recovered after dividing the contract manufacturing and brand-name businesses," he said.

The spin-off contract manufacturing unit, Wistron Corp, was formally set up on Monday.

Wistron announced on Monday that it expects sales to reach $6 billion in 3 years.

Acer, like many of its rivals, has been hit hard by the end of the global boom in personal computer sales and is struggling to react to the rapidly changing market.

Research firm IDC estimates that Acer is the world's ninth-largest PC maker, and number-eight in notebook computers.

On Tuesday, Acer shares were trading at T$22.20, up 20 cents from Monday's close of T$22.

Reuters contributed to this report.