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Acer's earnings slump

The Taiwanese hardware maker's revenue falls 38 percent in December due to sluggish demand for PCs and other factors.

Acer said it saw revenues fall 38 percent during the month of December.

The results reflect recent sluggish demand worldwide for personal computers. The Taiwanese company registered $161.2 million, or 4.43 billion New Taiwan dollars, from 7.17 billion New Taiwan dollars for the same period a year earlier.

Revenue for the full twelve months of 1996 equaled NT$57.94 billion, an 8 percent dip from NT$62.98 billion in 1995 and the first time the company has posted a decline in its entire 20-years in the PC business. The PC maker posted a 80 percent hike in revenue in 1995.

Yet, business was not as good for most of last year. December results marked the sixth consecutive month in which Acer posted earnings that lagged behind company estimates that one company official called part of an "overly optimistic" outlook for PC sales, the Wall Street Journal reported today.

Acer said lower earnings were in part due to a slump in memory-chip prices and lower motherboard sales revenues; many customers last year purchased motherboards without costly memory chips, resulting in an average lower unit price for the key pieces of PC circuitry.

The company plans to refocus its corporate market strategy this year to build more notebook PCs and servers and develop new product lines, as Acer weathers a transition period, a company official told the Journal.