Largan Precision Co (大立光電), a leading maker of camera lenses, expects growth to pick up in the final quarter of this year, helped by rising shipments of high-margin products and improving handset demand, a company executive said yesterday.
"We believe the third quarter will be our worst," chairman Lin Yao-yin (林耀英) told an investor's conference yesterday.
With new orders pouring in and increasing shipments of advanced lenses for higher mexapixel camera phones, Lin said "the fourth quarter could be the strongest period for Largan."
"We have no reason to be pessimistic [about the second half] as we already saw some positive signs from our customers," he said.
Largan, which supplies glass and plastic lenses for digital cameras and multifunctional printers, is counting on the mobile-phone industry for growth.
Its major customers include Nokia Ojy and LiteOn Technology Corp (光寶).
Lin's positive outlook came after Largan reported a lower second-quarter results amid gloomy prospects for handsets and digital cameras, which together make up a hefty 60 percent of the Taichung-based company's total sales.
Largan's second-quarter earnings fell nearly 13 percent to NT$312.9 million, or NT$2.88 a share, from NT$378.02 million three months ago.
Its gross margin fell 7 percent during the April to June period, dropping from 59 percent in the previous quarter to 51.6 percent, Largan said.
Company spokesman Charles Chiu (邱東泉), however, said he is confident the firm will achieve this year's financial forecast of NT$1.55 billion in earnings, or NT$14.38 a share.
But the mobile-phone segment's contribution to sales will fall from the company's previous estimate of 40 percent to around 35 percent, he said.
In the first half of the year, earnings climbed to NT$665.52 million, or NT$6.2 per share, up 43 percent from NT$444.95 million a year ago.
Lin said high-margin lens and phone modules for camera phones with megapixel resolution are expected to grow to make up 50 percent of the company's shipments from current 10 percent.
"The new products will offset the lukewarm demand for handsets and become a major engine to drive Largan's profits," said Ken Yu (
Advanced lenses have a 50-percent higher gross margin than VGA-resolution screens, which are now commonly used in digital cameras, or camera phones, Yu said.
Largan is planning to ship 20 million camera lenses and modules this year.
That figure, however, is lower than the estimate of 34 million units projected by an analyst with a US-based investment bank who requested not to be named.
"The lower-than-expected figure provides evidence that mounting inventory remains an issue for handset sector," the analyst said.
Largan shares advanced by 4.41 percent to close at NT$213 on the TAIEX yesterday.
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