Thu, May 05, 2011 - Page 12 News List

TPK profit surges on Apple’s growth

ROSY PROSPECTS:With more companies set to launch tablets and smartphones in the second quarter, the touch panel maker forecasts better sales and profits ahead

By Lisa Wang  /  Staff Reporter

TPK Holdings Co Ltd (宸鴻), which supplies touch panels for Apple Inc’s iPad and iPhone, yesterday said net profit last quarter grew 6.5-fold on soaring demand and better gross margins.

With its clients scheduled to roll out new products this quarter, TPK said it expected revenues to grow by 15 to 18 percent from last quarter’s NT$25.32 billion (US$883 million), which expanded nearly four times from last year.

“We are very optimistic about the industry’s development in the second quarter as a lot of companies are set to launch iPad-like products and smartphones in the next two to three months. That will have positive impact on the company,” TPK chief financial officer Freddie Liu (劉思亮) told an investor conference.

Sales reached NT$9.67 billion last month, down 5.9 percent from NT$10.27 billion in March, but up 278 percent from NT$2.56 billion a year earlier, company data showed.

Despite booking NT$120 million in foreign exchange losses, net income last quarter soared to a record-high NT$2.47 billion, or NT$10.66 per share, from NT$331 million, or NT$1.68 a share, a year ago.

TPK’s strong performance was bolstered by Apple’s robust sales of 18.65 million iPhones and 4.69 million iPads in the first three months of the year.

On a quarterly basis, net income in the first quarter increased 14 percent from a net profit of NT$2.16 billion in the final quarter.

Revenues dropped 5.5 percent quarter-on-quarter as the first quarter is usually a slack period for consumer electronics, but the result was still better than the company’s guidance of a decline of 10 to 15 percent.

Gross margin is expected to be little changed this quarter at about 18 percent, Liu said.

Gross margin last quarter rose to 18.9 percent from 16.4 percent a quarter ago and 18.3 percent a year earlier mainly because of an improved cost structure, with TPK using more in-house made touch sensors for large panels and shipping more higher-margin large-size touch modules.

TPK makes touch modules and touch displays primarily for handsets and tablet devices in Xiamen, Fujian Province. The firm also supplies touch modules or displays for e-readers, which accounted for about 5 percent of its sales last quarter.

To expand its capacity, TPK plans to more than double its capital expenditure to NT$20.34 billion this year from NT$9.4 billion last year.

Shares of TPK jumped 4.39 percent to NT$880 yesterday, beating the benchmark index, which edged up 0.01 percent.

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