Electronic components supplier Lite-On Technology Corp (光寶科技) yesterday reported its lowest profit in four quarters as it announced a strategic investment in Japanese power supply manufacturer Cosel Co.
Lite-On’s net profit for the first quarter of the year fell 30.98 percent to NT$2.39 billion (NT$73.44 million) from NT$3.46 billion the previous quarter, affected by lower sales and continued investment in research and development.
On an annual basis, net profit rose 1.49 percent from NT$2.35 billion, Lite-On said in an earnings report.
Photo: Fang Wei-chieh, Taipei Times
First-quarter sales decreased 22.04 percent from a quarter earlier and 15.8 percent annually to NT$28.78 billion, the company said.
Information technology products and consumer electronics segment made up 42 percent of Lite-On’s sales last quarter, ahead of cloud computing and artificial intelligence (AI) of things segment at 35 percent and optoelectronics segment at 23 percent, it said.
Gross margin and operating margin fell to 20.3 percent and 7.8 percent, from 22 percent and 9.3 percent in the previous quarter, respectively, although they each improved from 18.8 percent and 6.3 percent a year earlier.
Lite-On posted earnings per share (EPS) of NT$1.04 in the first quarter, down from NT$1.51 the previous quarter, but higher than NT$1.03 a year earlier, it said.
SinoPac Securities Investment Service Corp (永豐投顧) had expected the company to post first-quarter sales of NT$32.89 billion, with net profit of NT$3.01 billion, or EPS of NT$1.28.
Lite-On said the operating expenses for investing in research and development accounted for 6 percent of its first-quarter revenue, with a continued focus on cloud, optoelectronics, 5G and new business investments.
This quarter, Lite-On’s sales would increase from last quarter, driven mainly by growth momentum from high-value core businesses — including cloud computing power management, opto semiconductors, advanced power supplies for information technology applications and smart input devices — while shipments from its three major business segments are expected to gradually recover, it said.
The company said that efficient power management systems and thermal management technologies are its major competitive advantages, especially in the face of energy consumption challenges for AI servers.
“AI is revolutionizing our world. This transformation isn’t just about software innovation, but also hinges on the construction of efficient infrastructure,” Lite-On president Anson Chiu (邱森彬) said in the report.
“AI servers consume significantly more energy than traditional servers, making a comprehensive power management system and advanced thermal management technology crucial. These are areas where Lite-On has built significant competitive advantages over time,” he said.
In addition, the company said it had achieved significant progress in high-wattage power systems and liquid cooling solutions in response to the high computing power and high energy consumption requirements of next-generation AI servers.
Contributions from AI server power solutions are expected to account for 12 to 15 percent of the revenue of the cloud computing and AIoT segment this year, a significant increase from 7 to 8 percent last year, the Taipei-based company said.
Lite-On said it expects business to resume growth from the second quarter, and that it is confident of achieving double-digit percentage growth in annual sales for the next three years, starting this year.
It also said it is to acquire a 19.99 percent stake in Cosel at a cost of NT$2.53 billion, which would give Lite-On the right to nominate one board member and suggest one independent board director for the Japanese firm.
This strategic investment in Cosel is expected to create synergy between areas such as product development and manufacturing, as well as geographic footprint and market expansion, providing more comprehensive power solutions for customers, Lite-On said.
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