Asustek reports losses in 4Q 2018 due to Smartphone Business

by Hilbert Hagedoorn on: 03/21/2019 09:02 AM | source: | 17 comment(s)

For this first time ever (that we know of) ASUS has reported a loss in the last quarter of 2018, mainly due to its struggling smartphone business. Asustek has already begun reorganizing and adjusting its smartphone strategy in the first half of 2019.

The company reports a net loss of NT$2.82 billion (US$91.5 million) or EPS of negative NT$3.80 for the fourth quarter of 2018, due mainly to a one-time loss of NT$6.2 billion stemming from its smartphone business restructuring. The company's net profits for 2018 went down 73% on year to arrive at only NT$4.24 billion with EPS reaching NT$5.70, a new low since 2009 reports digitimes:

The company reports a net loss of NT$2.82 billion (US$91.5 million) or EPS of negative NT$3.80 for the fourth quarter of 2018, due mainly to a one-time loss of NT$6.2 billion stemming from its smartphone business restructuring. The company's net profits for 2018 went down 73% on year to arrive at only NT$4.24 billion with EPS reaching NT$5.70, a new low since 2009 reports digitimes: Asustek generated consolidated revenues of NT$88.1 billion for the fourth quarter of 2018, down 6% sequentially and 15% on year. Gross margin for the quarter was 4.1% and operating margin was negative 7.2%. The company's 2018 gross margin was 10.6% and operating margin was 0.8%. Asustek has already begun reorganizing and adjusting its smartphone strategy in the first half of 2019. The company's PC business is expected to see a revenue decline of around 5-10% sequentially and its motherboard/graphics card business will have an around 5% drop in the first quarter because of seasonality as well as negative factors including Intel's CPU shortages and US-China trade tensions. The company expects its smartphone business to be back on track in the second half of 2019, while its PC business will also begin see growth during the period. Asustek said it will distribute dividends of NT$15 per share in cash.

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yeeeeman
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#5652579 Posted on: 03/21/2019 02:52 PM

When you're selling only big slab phones, it is to be expected.

schmidtbag
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#5652583 Posted on: 03/21/2019 03:04 PM

When you're selling only big slab phones, it is to be expected.

Particularly in an already over-saturated market at a time when smartphone technology is starting to plateau in terms of performance and desirable features.

scoter man1
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#5652771 Posted on: 03/21/2019 09:19 PM

To be fair, asus does a terrible job loading up the hype train for any of their phones. I don't even know if they've released a new one this year and I don't miss much.

alanm
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#5652777 Posted on: 03/21/2019 09:33 PM

Particularly in an already over-saturated market at a time when smartphone technology is starting to plateau in terms of performance and desirable features.

Yep, Asus is a no-name in phones. But they are king of the hill in motherboards. Sticking to what one does best is good business practice imo.

Amaze
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#5652780 Posted on: 03/21/2019 09:39 PM

I had no idea they even made phones.

Solfaur
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#5652822 Posted on: 03/21/2019 11:13 PM

Guess those 1337 ROG gam3r phones didn't work out, huh...

Fox2232
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#5652830 Posted on: 03/21/2019 11:48 PM

When I check phones and make decision about upgrading, I make list of acceptable chips and then see all available phones with those chips.
ASUS phones often appear in the list but do not survive other checks. And it the end, their good phones are around 25% more expensive than comparable phones from other brands.
Yes, there are even more expensive phones with very comparable chip, memory, storage, ... but there are those much cheaper too.

Like new Samsung phones. Price looks really bad, but those cameras there... hard to find anything remotely close. And that seems to be ASUS's problem. Their good phones are well rounded (nothing extra), but not cheap. And people who already look at that price tag are willing to look $100~200 higher too.

Unstizzy
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#5652834 Posted on: 03/22/2019 12:03 AM

I own the Zenfone 5Q and it's a hell of a phone. Got it for around $270 when it came out and I haven't had any major complaints about it. Battery life is awesome.

Yakk
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#5652853 Posted on: 03/22/2019 01:40 AM

How are Asus upgrades, prompt security updates, and how many years support do you get on their phones?

Venix
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#5653215 Posted on: 03/22/2019 08:06 PM

I literally though their last phone was the zen phone 2!

MonstroMart
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#5653223 Posted on: 03/22/2019 08:20 PM

How are Asus upgrades, prompt security updates, and how many years support do you get on their phones?

I don't know if they treat their phones like their tablets but if they do it's no wonder people don't buy them.

I bought a Z301MF brand new in store from Asus like 1 year ago. Still stuck on Android 7. Some apps wont install because my devise is not supported. It was cheap and i don't regret it because i did not want to spend around 800$ CAD for an iPad or Samsung Galaxy Tab but still ... The Z301MF is still sold today in store (not discontinued yet) and is not even 2 years old and is not updated anymore already. The Tab S3 tablet by Samsung was released at around the same time as the Z301MF tablet and will get the Pie update next august. My iPod 4 was supported by Apple for around 3 years. It was cheap and i don't regret it but that's definitely my last tablet by Asus and i wont even waste my time looking at their phone.

rl66
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#5653239 Posted on: 03/22/2019 09:12 PM

Also the glorious ages of smartphone is far away...
Even Samsung and Apple change their plan because they are facing the same problem (and i don't speak about chinese brand that close agency to stay in the race).

Venix
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#5654128 Posted on: 03/26/2019 01:48 AM

@MonstroMart are any custom roms around? Like lineage (not justifying asus at all i im just curious).

RavenMaster
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#5654134 Posted on: 03/26/2019 02:13 AM

I doubt its just the phone. They probably lost quite a bit of money on their on their overpriced gaming laptops and the PG27UQ because no one was buying them.

fantaskarsef
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#5654175 Posted on: 03/26/2019 08:00 AM

Well phones... my co worker baught 4 asus phones of the same model (not sure which one), and he had to return three of them withing weeks. Asus probably lost money on that family alone, I'm not surprised.

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