COMPAL Electronics Inc., the world’s largest contract manufacturer of laptops by shipments, will sell more notebook computers than it had forecast, helped by Europe demand, Chief Financial Officer Gary Lu said.

Shipments may surpass 36 million notebooks this year, compared with Taipei-based Compal’s previous forecast for as many as 35 million, Lu said in a phone interview Monday. Demand from Europe and from students who bought computers ahead of the academic year helped the company beat its shipment projection last quarter, he said.

The company, supplier of low-cost notebooks to clients including Acer Inc. and Hewlett-Packard Co., benefited from rising demand for so-called netbooks as the global recession crimped consumers’ appetite for more-expensive models. Compal and Quanta Computer Inc., the second-largest laptop maker by\ shipments, both expect further growth this quarter after Microsoft Corp. releases its Windows 7 operating system.

“Europe demand is very strong,” Lu said in a phone interview Monday. “Back to school and regional demand came back” in the third quarter,’’ he said.

Compal will officially announce the revised forecast at its quarterly investor’s conference next week, Lu said. The company may post a 12-percent increase in third-quarter profit to NT$3.9 billion ($121 million), according to the median of 14 analyst estimates compiled by Bloomberg.

The company’s shares lost 0.8 percent to close at NT$42.10 in Taipei, compared with a 0.5 percent gain in the benchmark Taiex index.

A shortage of components and labor in China, Compal’s major manufacturing location, threatened to crimp sales during the third quarter, President Ray Chen said at an investor’s conference September 4.

“Our original concern of material shortage and China labor shortage” didn’t materialize, Lu said.

Quanta, which shipped 9.7 million units in the third quarter, said August 24 it will post volume growth of 20 percent this quarter from the preceding three months.

Compal, whose shipments overtook Quanta’s in the last quarter, shipped 4.15 million laptops in September, taking sales to 10.55 million notebooks for the third quarter.

Shipments increased 31 percent from the previous quarter, compared with the company’s prediction for 20-percent growth, Lu said. Compal expects a gain of 10 percent this quarter from the previous three-month period, according to Lu.

Compal may catch up with Quanta in full-year notebook shipments, “driven by netbook and better component management,” Patty Liu, a Taipei-based analyst at BNP Paribas, wrote in a report Monday. She reiterated her “buy” rating on the stock. (Bloomberg)