Largan Precision Co (大立光), a camera lens supplier for Apple Inc’s iPhones, yesterday reported that its profit last quarter was the best in six quarters on the back of significant foreign exchange gains.
However, the Taichung-based company gave a lukewarm outlook for its first-half results, saying that smartphone vendors are slow to upgrade phone camera lenses.
Most smartphone vendors have opted for hybrid or tetraprism compact lenses for their flagship models, Largan said.
Photo: David Chang, EPA-EFE
“Not many companies are upgrading their phone specifications,” Largan chief executive officer Adam Lin (林恩平) told an online investors’ conference. “Few new phones are to hit the market in the second quarter ... although some customers are considering high-end camera lenses for mid-range phones.”
As demand is expected to stagnate, this month and next month should be “little changed” from last month, Lin said.
There was little visibility for June, he said.
Net profit last quarter soared 86 percent to NT$6.11 billion (US$189.69 million) from NT$3.29 billion a year earlier, the firm said.
On a quarterly basis, net profit expanded 23 percent from NT$4.96 billion, it said.
Earnings per share rose to NT$45.79 from NT$24.64 a year earlier and NT$37.20 a quarter earlier, it said.
Non-operating profit last quarter skyrocketed to NT$3.47 billion, with most of it from foreign exchange gains of NT$2.34 billion, compared with non-operating profit of NT$470 million a year earlier, it said.
Largan reported non-operating losses of NT$1.78 billion in the previous quarter.
Gross margin dipped to 49.2 percent last quarter due to a smaller revenue scale after a brief return to above 50 percent in the fourth quarter last year at 52.88 percent.
Last year, gross margin fell below 50 percent in the first three quarters.
Revenue last quarter grew 24 percent year-on-year to NT$11.31 billion, although it fell 37 percent sequentially.
Asked about the company’s outlook for gross margin, Lin said that “price is the most important factor, followed by utilization and yield rate.”
Gross margin for its tetraprism compact camera module, a costly camera lens adopted by premium iPhones and flagship models from other brands, should improve this quarter thanks to a better yield, he said.
Largan expects factory utilization to reach 100 percent by the end of this year, as its lenses are getting bigger, Lin said.
Largan is adding equipment as the manufacturing technology gets more complicated, he said.
The company is considering adding new capacity next year, depending on customer demand, he added.
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