ASUS executives apologize for the poor performance in Q4 2022
As expected by the market, ASUS suffered a significant loss in the fourth quarter of last year due to the substantial decline in the graphics card and laptop shipments, slow inventory clearance, and the ineffectiveness of a 13.5% sales discount. According to a DigiTimes report, ASUS’s revenue in Q4 2022 was NTD 117.359 billion, a decrease of 11.72% compared to the previous quarter and a year-on-year decrease of 17.25%. The gross profit margin was only 8.17%, a decrease of 3.42 percentage points from the previous quarter and 11.41 percentage points from the same period last year. The operating profit margin was -4.24%, and the tax loss amounted to NTD 3.823 billion. Looking ahead to Q1 2023, ASUS’s shipments and revenue are expected to continue to decline, and its performance is inevitably going to decrease.
ASUS’s inventory value in Q4 2022 was NTD 132.773 billion, a 23.9% decrease from NTD 174.506 billion in the previous quarter. Additionally, ASUS’s inventory turnover days in Q4 2022 were 130, a further decrease from 148 days in the previous quarter.
This is the fourth single-quarter loss in ASUS’s history, with the previous three occurrences happening in Q4 2008, Q2 2009, and Q4 2018. The first two instances were due to a reversal in the laptop market, coupled with the impact of the financial crisis and internal operational issues. In contrast, the loss in Q4 2018 was due to the drag from the mobile phone business and the significant depreciation expense in that quarter, leading to ASUS’s overall restructuring and layoffs.
ASUS’s co-CEOs, Jonney Shih and Jerry Shen apologized to investors and explained the reasons for the decline. ASUS stated that the short-term operational abnormality will continue in the first half of 2023, and Q1 of this year is expected to be the bottom of the year, with revenue declining by another 15% on a quarter-on-quarter basis. From Q2 onwards, there will be a gradual recovery with a quarter-on-quarter revenue increase of 10%, and there is a possibility of continued losses in the first half of the year. However, given ASUS’s strategy misjudgment in 2022, many internal problems still need to be resolved.