Smartphone camera lens maker Largan Precision Co (大立光) last quarter saw its net income shrink 40 percent from a year earlier to NT$3.29 billion (US$107.88 million), dragged by tepid sales and a suboptimal product mix, its management said yesterday.
Order visibility is weaker for this month and next month, compared with orders last month, Largan chairman and CEO Adam Lin (林恩平) told an online earnings conference.
Demand for low-end and mid-range smartphones has showed improvement, but remains soft for high-end models, Lin said.
Photo: Chen Mei-ying, Taipei Times
The results translated to earnings per share of NT$24.64, the worst in seven quarters and much lower than NT$41.3 during the same period last year, and NT$30.15 in the preceding quarter.
The Taichung-based company — which counts Apple Inc, Sony Corp, Samsung Electronics Inc and Huawei Technologies Co (華為) as its top clients — is taking a hit from a downcycle for technology products induced by high global inflation and drastic monetary tightening.
The slow season is likely to persist this quarter without visibility beyond, Lin said.
Gross margin shed 6.5 percentage points from three months earlier to 49.4 percent, falling below the 50-percent threshold it had held for several years, company data showed.
A less competitive product mix was responsible for the drop, Largan investor relations official Josephine Huang (黃印嘉) said.
Camera lenses featuring more than 10 million pixels comprised 60 to 70 percent of shipments, while 20-million pixel lenses accounted for 10 to 20 percent, and 8-million pixel lenses were less than 10 percent of orders, Huang said.
Largan is not interested in manufacturing low-margin products, and the company has not seen meaningful revenue contributions from non-smartphone lenses used in vehicles, drones, and virtual or augmented reality devices, she said.
The firm’s consolidated revenues amounted to NT$9.14 billion, retreating by 36.51 percent from the final quarter of last year, and by 10 percent from a year earlier, Huang said.
The company incurred NT$460 million in foreign exchange losses after the local currency gained strength against the US dollar, she said.
Lin said that some clients intend to introduce products with camera lenses using a glass molding process to upgrade their technology, starting in the first half of next year.
While products with high specifications feature better selling prices, relatively low-yield rates could drive up production costs, Lin said, adding that competition would heighten when specifications stall.
Largan has been a leader in the sector because of its better yield rates.
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