Local electronics component maker Lite-On Technology Corp (光寶科技) yesterday said it was on track to lift its operating margin in the second half of the year, thanks to rising demand for its main products — such as power supplies — in the traditional high season.
“Our operating margin is improving in the second quarter, helped by better cost control and operation efficiency. We expect the margin to trend up further in the second half of the year,” said Julia Wang (王玉玲), director of Lite-On’s investor and public relations division.
“The first quarter is the trough,” Wang said. “The operation of our subsidiaries and core businesses are trending up this quarter.”
Lite-On made the remarks after reporting disappointing first-quarter earnings in late April.
Wang said the Japanese unit would not be reporting massive foreign exchange losses this quarter after Lite-On booked NT$300 million (US$9.6 milliion) in losses from the unit in the first quarter.
However, Lite-On also said revenues would fall drastically in the fourth quarter after it sells a PC monitor manufacturing unit to local laptop computer maker Wistron Corp (緯創) at the end of this month. The PC monitor unit made up around 45 percent of Lite-On’s overall revenues last year.
To seek further growth, Lite-On is looking into new acquisition deals, Wang said. Lite-On plans to raise more than NT$10 billion later this year by arranging syndicated bank loans to repay debts and to pave the way for new acquisition deals, Wang said.
On April 30, Lite-On told investors that it aimed to lift its operating margin to between 2.3 percent and 2.8 percent helped by rising demand for its power supply and new LED chip packaging business, compared with 2.1 percent in the first three months of the year.
Lite-On is scheduled to release its second quarter earnings and to give its outlook for the third quarter on Aug. 28.
Lite-On made NT$638 million in earnings, or NT$0.3 per share, for the first three months of the year, down 63 percent from NT$1.74 billion, or NT$0.6 a share, in the same period last year.
The company blamed the lackluster earnings results on a fire at a Chinese plant, rising labor costs in Chinese operations, climbing raw material prices and additional spending on employee bonuses.
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