TPK Holding Co (宸鴻), a major supplier of touch modules to Apple Inc, yesterday said third-quarter earnings more than doubled to NT$3.63 billion (US$120 million) on stronger-than-expected smartphone shipments.
That translated to earnings per share of NT$14.84, up from NT$5.28 in the same period last year and NT$14.65 in the second quarter, according to a company statement.
The company, which supplies touch modules for Apple’s iPhone and iPad, as well as Amazon’s Kindle Fire tablet, saw third-quarter revenue hit a record NT$40.05 billion, an increase of 133 percent year-on-year and up 23 percent quarter-on-quarter.
TPK — which has more than 30 customers in Japan, South Korea and the US — generated more than 70 percent of its revenue from Apple, its largest customer.
The company earlier expected third-quarter revenue to remain flat from the second quarter, but shipments for new smartphones and new handheld gaming devices fueled revenue growth, TPK chief financial executive Freddie Liu (劉詩亮) told investors at a quarterly conference.
Earnings for the first three quarters nearly tripled to NT$9.81 billion, while revenue nearly doubled to NT$97.89 billion.
While the global economy in the fourth quarter is still in a state of “chaos,” the company forecast revenues would be flat or rise as much as 5 percent on new tablet shipments, he said.
Bank of America Merrill Lynch forecast earlier this month that TPK’s revenue growth in the fourth quarter would be as high as 15 percent quarter-on-quarter.
With pressure on average selling prices and higher labor costs, fourth-quarter operating margin is expected to decline 2 to 3 percentage points from 11.6 percent in the June-to-September period, Liu said.
TPK expects NT$4 billion to NT$5 billion in capital expenditure in the fourth quarter, bringing its whole-year spending to between NT$18 billion and NT$19 billion.
However, capital spending for next year is expected to fall to between NT$10 billion and NT$12 billion, Liu said.
He attributed the move to slower capacity expansion plans, except for boosting the capacity of large-sized cover glasses.
TPK yesterday also defended its self-developed touch-on-lens solution, saying the technology could be the next mainstream trend and that it had aroused the interest of many customers.
The technology combines sensors into cover lenses, meaning smartphone or tablet screens would be even slimmer than those available today.
Liu said the margin from the newer technology would be higher and that he is confident of achieving a high yield rate.
TPK plans to start mass producing touch-on-lens panels starting in July next year, with capacity of smaller and larger-sized panels each expected to hit 2 million sheets per month.
TPK shares rose 2.83 percent to close at NT$581 on the Taiwan Stock Exchange yesterday, before the investor conference.
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