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UPDATE 1-Taiwan laptop maker Compal upbeat on Q2

Published: 25 Feb 2009 02:46:17 PST

* Expects Q2 shipments to climb 15 pct Q/Q

* Reiterates 32-35 mln full-year shipment target

* Netbook PCs to take up 25 pct of all shipments

* Global laptop PC shipments revised down to 145 mln units (Adds details, quotes)

TAIPEI, Feb 25 - Taiwan's Compal Electronics, the world's second largest contract laptop maker, issued an upbeat outlook for the second quarter, as clients stock up from depressed inventory levels.

Compal President Ray Chen said he expects shipments in April-June quarter to be 15 percent higher than between 5.8-6.2 million units it expects to ship in the current quarter.

"The economy hasn't really turned around, but we are coming off a very low base in the first quarter, so there will be growth," Chen said during an investor conference, adding that these were very conservative estimates.

Compal, which trails bigger crosstown rival Quanta, is a key supplier to top PC brands such as Hewlett-Packard, Dell and Acer.

Compal and Quanta Computer produce about 60 percent of all of the world's laptop PCs, and many analysts look closely at their shipment figures to provide a steer to global demand for personal computers.

Chen also reiterated the company's previous forecast of aiming to ship 32-35 million laptops this year.

Chen said Compal's gross profit margin should remain flat this year, even as the share of low-cost netbook PCs increases in the company's revenue.

"As contract manufacturers, we're increasingly being squeezed dry by our clients. At this point, there is already not much left to squeeze and we'll just have to say no," said Chen.

Compal reported a 34 percent fall in fourth-quarter earnings results last week but had not given any forecast.

The company unveiled its outlook after the local stock market ended trading. Its shares ended up 5.6 percent, outperforming the big board's 1.4 percent rise.

Compal said it now expects total global notebook shipments to grow to 145 million units this year, lower than its previous forecast of 160 million to 165 million units.

This figure is lower than research firm IDC's global notebook PC forecast, which says total shipment numbers should grow by 15 percent this year to 168 million units.