Lite-On's second quarter profits grow to NT$1.5 billion

Lite-On Technology Corp (光寶科技), the nation's largest maker of computer monitors, had an 88 percent rise in second-quarter profit, helped by what analysts said were one-time gains from the sale of assets in units absorbed last year.

Net income increased to NT$1.5 billion (US$43.9 million) in the three months ended June 30, from NT$800 million a year earlier. Sales rose to NT$39.9 billion from NT$19.6 billion, the company said in a statement to the Taiwan stock exchange.

Lite-On, whose customers include Hewlett-Packard Co, got about a third its net income from non-operating gains including profits on the disposal of assets in former affiliate Silitek Corp (旭麗), said Steven Tseng (曾緒良), an analyst with Yuanta Core Pacific Securities (元大京華證券).

Siltek, a maker of computer keyboards, was one of four units taken over by Lite-On last year.

"The company hasn't seen any real benefit from the mergers," Tseng said.

Lite-On, which competes with larger rival Hon Hai Precision Industry Co (鴻海精密) as a maker of electronics for brand-name companies, needs to make good on promises to improve operating performance after the combination, he said.

Lite-On said it expects sales to increase about 20 percent this quarter from the second. Most of the growth will come from shipments of flat-panel monitors, which will increase by 40 percent from the second quarter, the company said.

Third-quarter gross margin, or the percentage of sales left after production costs, will be about 12 percent compared with 12.4 percent in the second quarter, the company said.

Lite-On expects shipments of mobile phones to increase by about a 10th in the third quarter from the second. Handset sales, which have been affected by excess inventory in China, won't improve much until the fourth quarter, the company said.

The company's handset business has been disappointing, some analysts said.

"Some of Lite-On's competitors in Taiwan are already delivering color handsets," said Robert Cheng, an analyst with CLSA Asia Pacific Markets.