Compal Electronics reported a remarkable recovery in its second-quarter gross profit margin, reaching 5% for the first time since the fourth quarter of 2011. This achievement marks a significant departure from the company’s historical “gross three to four” trend, where margins lingered between 3% and 4%. The after-tax net profit soared by 52% from the previous quarter to 2.881 billion yuan (US$390 million), marking the highest profit in the past ten quarters. Net earnings per share stood at 0.66 yuan. The company’s profit for the first half of the year increased by 37% compared to the previous year, with net earnings per share at 1.1 yuan.
Compal attributed its improved performance to strategic shifts toward high-margin sectors like automotive and servers, enhancing its product mix and efficiency. The company’s non-PC revenue accounted for 27% of total sales in Q2, with shipments of mobile phones, wearables, and servers experiencing double-digit growth. Meanwhile, PC shipments grew 16% quarter-on-quarter, surpassing initial projections of single-digit growth.
Operating profit margins improved to 1.7%, reflecting a quarterly increase of 0.3 percentage points. Compal anticipates stable PC shipments in Q3, alongside continued growth in automotive and server products, as it strives to optimize its product portfolio for higher profitability.
