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By | Paul Kunert 21st October 2011 12:09

Acer cuts losses and inventory in Q3

Taiwanese vendor moving into recovery position

Acer losses narrowed in its third quarter ended September but the bust consumer sector and inventory woes still weighed heavy on its bottom line.

The troubled Taiwanese titan reported prelim losses of NT$1.1bn (£22.9m) compared to profits of NT $4.29bn (£89.3m) for the three month trading period a year earlier. Sales fell 28 per cent year-on-year to NT$347bn (£7.2bn).

The bottom line was in better shape than in the previous quarter however when Acer posted a net loss of NT$6.79bn (£143m).

"Channel inventories significantly reduced to a reasonable level," Acer said in a statement.

However, the knock-on impact on the stocking issues has left a lasting impression on the channel as retailers and distributors remain reluctant to place large orders from Acer, as revealed in Gartner's worldwide channel sales-in data.

Closer to home, Acer has also suffered a drop in market share with IDC data for the UK showing that sales-in declined 52 per cent in Q3.

The firm, which parted with its CEO Gianfranco Lanci in March – he is now a consultant at Lenovo as revealed first by El Reg – has also gone through an organisational rejig that has seen a number of senior figures leave the organisation.

Efforts to create a more flexible supply chain are under way with some shipments starting to come by rail as well as by sea which should allow Acer to react more swiftly to fluctuating consumer demand if it can convince channel customers to re-engage. ®

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