Fri, Jul 29, 2011 - Page 12 News List

E Ink optimistic on Q3 outlook after profit fall in Q2

By Amy Su  /  Staff Reporter

Despite a weak second quarter, E Ink Holdings Inc (元太科技), the world’s biggest e-paper display supplier, expects earnings to pick up in the second half of the year on strong seasonal demand.

Net income fell to NT$1.33 billion (US$45.94 million), or NT$1.22 per share, during the April-June period, compared with NT$1.68 billion, or NT$1.56 per share, in the first quarter, the company said.

However, the company remained optimistic about its performance in the second half of the year and revised up its guidance for e-reader full-year global shipments to 25 million to 30 million units, from the 20 million to 30 million estimates it made in April.

“Thus far, the company has received substantial orders for shipment in the third quarter, further raising our confidence that third-quarter revenues and profits could rebound to the levels seen in the first quarter, or even higher,” company chairman Scott Liu (劉思誠) told an investor conference.

Liu expects e-paper displays to account for more than 70 percent of the company’s revenues this year on growing shipments in the second half of the year.

The company attributed the drop in second-quarter profits to slow seasonal demand for both LCD panels and e-paper displays as well as clients’ move to digest old stock before launching new products in the third quarter.

“The second quarter has always been a slow season for the electronics industry,” Liu said.

Samsung Electronics Co — one of E Ink’s major clients for LCD panels, accounting for almost 30 percent of E Ink’s revenue — also cut orders in the second quarter as it struggled with higher-than-expected tablet inventories after Apple Inc launched its iPad2, he added.

However, Liu said he did not expect the iPad2 to cut into the demand for e-readers, adding that research showed that about 40 to 50 percent of people who have a tablet also own an e-reader, an indication that both markets would expand together in the future.

The firm’s net income more than doubled in the first half of the year to NT$3 billion, or NT$2.78 per share, on higher-than-expected profit in the first quarter, company data showed.

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