Largan Precision Co (大立光) yesterday reported that its net profit last quarter hit the highest in eight quarters, driven by strong demand for smartphone camera lenses and gross margin improvement, but the company offered a cautious outlook for this quarter.
The nation’s largest handset camera lens maker said that net profit for the third quarter rose 11.4 percent year-on-year and surged 47.4 percent quarter-on-quarter to NT$6.63 billion (US$206.1 million).
That translated into earnings per share of NT$49.67, topping the NT$44.44 consensus estimate from a Yahoo Finance poll of analysts and marking the highest level in two years.
Photo: Ou Yu-hsiang, Taipei Times
Largan’s third-quarter revenue was also a record for the same period, rising 39.04 percent year-on-year to NT$18.95 billion last quarter as the company benefited from the intensive pull-in of camera components for Apple Inc's iPhone 16 series.
Largan and local rival Genius Electronic Optical Co (玉晶光) are two of Apple’s largest camera lens suppliers.
The company’s gross margin reached 50.22 percent last quarter, up from 42.56 percent a year earlier, it said.
Lenses with a resolution of 20 megapixels or more — a higher-margin product and one of Largan’s specialties — accounted for 10 to 20 percent of the company’s sales last quarter, and those of 10 to 20 megapixels made up 60 to 70 percent of sales, while 8 to 10 megapixel lenses comprised about 10 percent. Other products such as voice coil motors constituted 20 to 30 percent of sales, the company said.
During the first three quarters of this year, Largan’s net profit increased 31.96 percent to NT$17.24 billion from NT$12.94 billion in the same period last year, with earnings per share rising to NT$129.16 from NT$96.93, while revenue expanded 33.23 percent to NT$41.25 billion and gross margin increased 3.09 percentage points to 49.45 percent, it said.
The strong results came after market research firm International Data Corp on Monday reported that despite macroeconomic concerns, global smartphone shipments last quarter increased 4 percent year-on-year to 316.1 million units, the fifth consecutive quarter of growth.
Meanwhile, another research firm Canalys in its calculations, also released on Monday, pegged the increase for the same period at 5 percent, attributing the growth to ongoing replacement demand.
As the world economy does not fare well and concerns about iPhone 16 sales are rising, the company’s revenue for this month would be flat from last month, and next month’s revenue would be lower than this month, Largan chief executive officer Adam Lin (林恩平) told an online investors’ conference, without offering exact figures.
“Demand in the fourth quarter does not look good. It will be much worse than the third quarter,” Lin said, citing order cuts by customers and the entry of new competitors.
However, the factory utilization rate in the fourth quarter is expected to be similar to that in the third quarter, he said, mainly given the company will be producing confirmed next year's orders ahead of schedule.
Lin said the company’s manufacturing facilities in Taichung are fully loaded and a larger plant would be completed in September next year for smartphone camera lens production.
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