Powertech Technology Inc (力成科技), the nation’s biggest computer memory chip packager, yesterday said its consolidated net income reached NT$1.82 billion (US$62.6 million) in the fourth quarter of last year, up 8 percent from the same period of 2009, but down 12.4 percent from the previous quarter.
Earnings per share were NT$2.5 in the fourth quarter and reached NT$10.53 for the whole of last year, the Hsinchu-based company said in a stock exchange filing.
Consolidated sales in the October-to-December period totaled NT$10.06 billion, up 15.1 percent year-on-year and 2.2 percent quarter-on-quarter.
Powertech’s quarterly profit was lower than Citigroup’s forecast of NT$1.95 billion and the average NT$1.99 billion forecast in the Bloomberg survey of analysts.
The company’s gross profit margin of 25.1 percent in the fourth quarter also fell below Citigroup and other analysts’ estimates, mainly owing to unexpected foreign exchange losses incurred in the quarter, Citigroup analyst Roland Shu (徐振志) said in a note yesterday.
While reiterating its positive view on the company, Citigroup said that by assuming the New Taiwan dollar would appreciate to NT$29 against the US dollar this year, it reduced its earning forecast for Powertech by 8 percent to NT$11.3 per share this year and cut its target price to NT$127 from NT$130 made previously, according to the note.
Shares of Powertech fell 1.41 percent to NT$105 yesterday on the Taiwan Stock Exchange, ahead of the release of the company’s latest quarterly results.
Going forward, Powertech ensured the first quarter would be the "trough quarter" this year, said Shu, who attended the company’s quarterly investors conference held yesterday at a Taipei hotel.
The company said it expected revenue to decline by 3 percent this quarter from the previous quarter on falling average selling prices, foreign exchange losses and production cut by key customers, while gross margin would also be negatively impacted by the NT dollar appreciation, Shu said.
Powertech also said its capital spending would be around NT$10 billion this year, compared to NT$12 billion for last year.
“We expect Powertech’s shares to catch up on stabilized DRAM prices and strong Nand Flash and mobile DRAM momentum from rapidly growing smartphone and tablet applications,” Shu said in the note.
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