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Acer revenue falls in Q2 amid European debt woes

Acer revenue falls in Q2 amid European debt woes

Component costs continued to rise in the second quarter, the company said

Acer, one of the world's top three PC vendors, reported a decline in revenue in the second quarter compared to the first quarter as the value of the euro fell.

The company's preliminary results for the second quarter showed revenue rose 26 percent year-on-year to NT$150.2 billion (US$4.7 billion), but the figure marked a 7 percent decline from the first quarter's NT$162.1 billion. Acer's net profit in the second quarter was NT$3.59 billion.

In a statement, Acer blamed the quarter-on-quarter revenue drop on the decline in the euro's exchange rate. Acer also turned away some less profitable orders for its wares in order to maintain its profit margin, the company said.

Most of Acer's revenue comes from Europe, where sovereign debt worries in Greece, Spain and elsewhere surfaced in the second quarter, sending the euro tumbling in value against other major world currencies. In the first quarter, Europe accounted for 50 percent of Acer's revenue, with 27 percent coming from the U.S. and most of the remainder from the Asia-Pacific region.

The company said component costs also continued to rise during the quarter.

One bright note was the company's net profit, which rose compared to the first quarter's NT$3.29 billion despite the revenue decline, foreign exchange depreciation and rising component costs.

In June, Acer executives said the company had raised PC prices for the first time in five years due to tight component supplies and other reasons, calling it a very rare event in the PC industry.


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