Acer loses $234 million in worse-than-expected Q2

Acer Inc. Q2 2011 preliminary financial results:
operating loss NT$7.1B (US$246M), PAT -NT$6.8B (-US$236M), EPS -NT$2.57

TAIPEI, TAIWAN (August 24, 2011) – Acer Inc. announces the preliminary financial results for Q2 2011. Consolidated revenue was NT$102.1B (US$3.5B), down 32% year-on-year (YOY), operating loss was NT$7.1B (US$246M), profit after tax (PAT) was -NT$6.8B (-US$236M) and earnings per share (EPS) was -NT$2.57. The Q2 loss accounts for US$150 million in sales allowance to clear channel inventory in EMEA, US$30 million for cost of EMEA reorganization, inventory clear-up due to sluggish economic situation, and senior executive severance pay.

For first half (1H) 2011 preliminary results, Acer's consolidated revenue was NT$229.9B (US$8.0B), declining 26% YOY. Operating loss was NT$5.2B (US$179M) due to unfavorable internal and external impacts on company in Q2. PAT was -NT$5.6B (-US$195M) and EPS was -NT$2.12.

Under a new strategy, Acer's business model is changing from monitoring product sell-in only to include the final product sell-through, which means to keep closer watch on the market end for better total inventory control. In Q2 Acer made efforts to further downsize channel inventory due to stagnant European and US economies, and the slow PC market. Additionally, the company paid considerably in senior executive severance pay. Consequently, Acer suffered higher than expected loss in Q2.

In Q3 2011, Acer expects revenue growth and improved gross margin quarter-on-quarter (QOQ). As for Q4 2011, Acer anticipates a stable business operation and better gross margin from Q3.

Notes:
The exchange rate was US$1: NT$28.802.
Acer Inc. consolidated revenue includes revenues from other companies in which Acer Inc. has 50% or more ownership, and already deducts any revenues between Acer Inc. and these companies to avoid double-counting.

About Acer
Since its founding in 1976, Acer has achieved the goal of breaking the barriers between people and technology. Globally, Acer ranks No. 2 for total PCs and notebooks. A profitable and sustainable Channel Business Model is instrumental to the company's continuing growth, while its multi-brand approach effectively integrates Acer, Gateway, Packard Bell, and eMachines brands in worldwide markets. Acer strives to design environmentally friendly products and establish a green supply chain through collaboration with suppliers. Acer is proud to be a Worldwide Partner of the Olympic Movement, including the Vancouver 2010 Olympic Winter Games and London 2012 Olympic Games. The Acer Group employs 8,000 people worldwide. Revenues for 2010 reached US$19.9 billion. See www.acer-group.com for more information.
? 2011 Acer Inc. All rights reserved. Acer and the Acer logo are registered trademarks of Acer Inc. Other trademarks, registered trademarks, and/or service marks, indicated or otherwise, are the property of their respective owners.

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US Government offers up $103 million for rural broadband expansion

Agriculture Secretary Vilsack Announces Projects to Provide Broadband to Rural Communities

WASHINGTON, D.C., August 22, 2011 – Agriculture Secretary Tom Vilsack announced today that 18 recipients will receive more than $103 million in funding for 23 projects to provide broadband services to unserved and underserved rural communities. Residents and businesses that will benefit from this funding include those in an Oklahoma community damaged by a tornado earlier this year.

"Without broadband, rural communities, agricultural producers and business owners face a substantial challenge," Vilsack said. "These loans and grants will bring the benefits of broadband, including new educational, business and public health and safety opportunities, to residents living in some of the most remote parts of our Nation."

One of the successful applications is from Wichita Online, Inc., which will use a USDA Rural Development Community Connect program grant to provide broadband to the rural community of Tushka Town, Okla. The community was hit by a tornado on April 14, 2011, that killed two people and destroyed or damaged a number of buildings in the community. Rural Development's $480,000 grant to Wichita Online, Inc. will provide residents with broadband service and new opportunities for economic development.

The Community Connect program has been instrumental in providing broadband access to residents in remote areas and low-income communities. This year, the Karuk Tribe in Orleans, Calif., will receive a Community Connect grant to provide Internet services to 570 tribal members in a mountainous region of Northern California. Of the Community Connect grants being announced today, seven grants will provide broadband to communities that are plagued by persistent poverty.

In addition to the Community Connect grants, Secretary Vilsack announced $90 million in loan funding for five broadband infrastructure projects. For example, the Dubois Telephone Exchange, for example, has been selected for an $11.4 million loan to provide broadband to nearly all of the businesses and residents in Wyoming's Upper Wind River country and Little Snake River Valley. The loan is expected to create 100 jobs and save up to 150 others. Recreation and tourism are the leading industries in Dubois and the Upper Wind River Country, and broadband will enable those industries to thrive. The Vernon Telephone Cooperative, in Westby, Wis., has been selected for a $24 million loan to build a Fiber-To-The-Premises (FTTP) system in areas outside the town. Vernon also plans to make other system improvements in several area exchanges.

The infrastructure loans announced today are in addition to $192 million in loans Secretary Vilsack announced on July 27, 2011, through USDA Rural Development's Telecommunications Infrastructure Program.

The Community Connect program provides grants to rural, economically challenged communities. Funds can be used to construct, acquire or lease facilities to deploy broadband to community facilities such as schools and public safety buildings, as well as residents and businesses in the community. Each project requires a matching contribution and must serve an area where broadband is not available. The grantee must agree to provide local community centers in the selected towns with at least 10 computers which are accessible free for two years. USDA funding for all loans and grants is contingent upon the recipient meeting the terms of the loan or grant agreement.

For a complete list of the awardees, click here.

In June, President Obama signed an Executive Order establishing the first White House Rural Council, chaired by Agriculture Secretary Tom Vilsack. The White House Rural Council will work throughout government to create policies to promote economic prosperity and a high quality of life in rural communities.

Since taking office, President Obama's Administration has taken significant steps to improve the lives of rural Americans and has provided broad support for rural communities. The Obama Administration has set goals of modernizing infrastructure by providing broadband access to 10 million Americans, expanding educational opportunities for students in rural areas, and providing affordable health care. In the long term, these unparalleled rural investments will help ensure that America's rural communities are repopulating, self-sustaining and thriving economically.

USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. Rural Development has an existing portfolio of more than $155 billion in loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.

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Apple, Microsoft meet with Turkish minister, may bid to supply 15 million tablets to schools

By Zach Honig posted Aug 20th 2011 1:41AM When it comes to the economy, things appear to be pretty shaky in the land of feta and olive oil, but at least Greece's neighbor to the east is ready to spend, considering a very ambitious (and costly) investment in its education system. Turkish Economy Minister Zafer Caglayan just completed a tour through Seattle and Silicon Valley, making stops to meet with executives at Apple, Intel and Microsoft along the way. Caglayan's stateside mission was to discuss Turkey's FATIH Project, which somehow stands for "Movement of Enhancing Opportunities and Improving Technology" and aims to equip 15 million students with tablets within the next four years. The official seems to have left with a positive impression, telling the Turkish Weekly that "upon agreement, Microsoft teams will come to Turkey to cooperate with Turkish firms on the project." He went on to say that Apple executives expressed interest in having iPhone and iPad accessories manufactured in Turkey as well. Doesn't exactly sound like a firm commitment from either company, but 15 million tablets would be nothing to sneeze at, so we'd be surprised if the tablet makers didn't end up making formal bids. With South Korea and now Turkey making commitments to improving education, perhaps we'll see a similar plan hit stateside soon?

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