D-Link 2012 Q3 Operation Review

2012-10-31

For the third quarter of 2012, D-Link posted net revenue of NT$8.367 bln, up 8.4% from sequential quarter as a result of seasonality and down 2.2% from same period last year due to generally weaker end consumer demand globally especially in the developed countries.  Gross margin excluding inventory provisional gain/loss was 30% in 3Q12, up from 28% in prior quarter benefitting from new cloud products launch and higher switch products sales.  Gross margin including inventory provisional gain/loss was 29.6% in 3Q12, up from 26.7% in 2Q12.  Operating expenses as percent of net revenue was 26.3%, down from 27.9% in previous quarter due to higher revenue base.  Operating margin in 3Q12 recovered to 3.3% as compared to a negative margin of -1.2% in the second quarter.  Net non-operating profit in 3Q12 was NT$109 million comprising of NT$56 million income recognized from long term investee companies under equity method, NT$6 million investment gain, NT$10 million foreign exchange gain and NT$37 million derived from financial and other income.  The Group reported third quarter consolidated net income after tax and minority interest of NT$288 million and EPS was NT$0.45 per share based on weighted average capital of NT$6.352 billion.