This represents a record-low quarterly gross profit margin of only 1.8 percent.

The Taipei-based company also reported a negative operating income. It incurred an unexpected net income loss of NT$559 million and earnings per share of minus NT$0.25 for the January-March period. This comes a day after its bigger rival Compal Electronics Inc. reported a flat year-on-year growth in notebook PC shipments this year. Its net revenue also dropped by 19 percent to NT$85.62 billion from the previous quarter.

The decline is a result of increasing labor and component costs, as well as weaker demand from new customers, Pegatron CEO and President Jason Cheng said at the company’s investor conference in Taipei.

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