Local electronic component maker Lite-On Technology Corp (光寶科技) yesterday posted a better-than-expected operating profit for the fourth quarter of last year, thanks to improved gross margin and falling operation costs after selling its monitor manufacturing unit.
After shifting its business focus to higher-margin and growth-potential areas, including power supplies and light-emitting-diodes (LED, Lite-On improved its operating profit margin to 7.6 percent in the fourth quarter, from 3.6 percent a year earlier, the company said in a statement.
This was better than the company’s estimate of between 5.6 percent and 6.2 percent in operating profit margin.
Gross margin improved to 14.7 percent in the fourth quarter, from 9.5 percent the previous year, while operating expenses dropped 42 percent year-on-year to NT$1.8 billion (US$53 million) in the three months ending on Dec. 31. Net income plunged 83 percent to NT$325 million in the final quarter of last year, from NT$1.97 billion a year earlier.
“We believe operations and profitability will be even better in the first and second quarters,” company chief executive Terng Kuang-chung (滕光中) told a media briefing yesterday, basing his confidence on the 20 percent month-on-month growth in sales last month to NT$7.3 billion.
By making niche products rather than slim-margin PC monitors, the electronic component maker seems to be well on track.
Lite-On sold its LCD monitor unit to local PC contract maker Wistron Corp (緯創) in the third quarter of last year.
Its power supply and LED businesses accounted for about half of Lite-On’s total revenues of NT$142 billion last year.
Lite-On’s LED business has interested investors. The company now has between 26 percent and 27 percent market share for LED backlights used in notebook screens, which it expects will grow to 30 percent by the end of this year on an uptake in ultra-slim notebook computers and netbook computers.
Lite-On shares have risen 8.62 percent since early this year.