Wed, Feb 11, 2009 - Page 11 News List

Largan Precision posts drop in fourth-quarter profit

By Kevin Chen  /  STAFF REPORTER

Camera lens maker Largan Precision Co (大立光) yesterday posted a 29.5 percent drop in fourth-quarter profit amid weak global demand for consumer electronics.

Largan, whose lens products are used in cellphone cameras, digital cameras and multifunctional peripherals, saw profit fall to NT$801 million (US$23.58 million), or NT$6.15 in earnings per share, in the three months ending on Dec. 31, from NT$1.13 billion, or NT$9.09 per share, in the previous quarter.

Its fourth-quarter profit compared with NT$863 million a year earlier, a company filing with the Taiwan Stock Exchange and the company’s finance tallies said.

Despite an industry downturn, Largan’s profit was NT$3.24 billion or NT$24.89 in earnings per share for last year, up from NT$2.57 billion, or NT$20.44 per share, in 2007.

SinoPac Securities Corp (永豐金證券) had predicted Largan’s fourth-quarter earnings per share would drop to NT$3.84 and its earnings per share for last year would be NT$22.58.

Shares of Largan were up 2.46 percent to NT$229.5 yesterday, outperforming a 0.7-percent rise on the TAIEX. The company’s investors conference was held after the stock market closed.

On Thursday, Largan said its sales had fallen 44 percent to NT$338 million last month from a year earlier. At the time, the company said last year’s revenue grew 27 percent to NT$7.48 billion from 2007.

Chairman Scott Lin (林耀英) did not give a sales guidance for this year, but said at the conference he was conservative about the company’s prospects as the business outlook “was not good in the first quarter” and “there is no clear visibility in the second and third quarters.”

Lin told investors and analysts that he had never seen anything like the current economic downturn since founding Largan in 1980.

The severity of the downturn could prove much worse than the Great Depression of the 1930s and the economy may not begin to recover until 2011, he said.

Largan said gross margin was 51.68 percent in the fourth quarter and 53.45 percent for last year, because of growing shipments of high-value 3-megapixel phone lenses.

But migration of camera resolution to higher megapixel models may slow this year as consumer demand for replacements weakens, sparking concerns about the company’s ability to retain gross margin above 50 percent this year, analysts said before yesterday’s conference.


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