TPK Holding Co (宸鴻), which counts Apple Inc as its No. 1 touch-panel client, yesterday said its net profit rose more than 70 percent sequentially in the first quarter as a better product mix and production efficiency lifted margins.
Net income rose to NT$2.62 billion (US$88.77 million), or NT$10.71 per share, from NT$1.53 billion, or NT$5.97 per share, in the previous quarter.
The figure was also up 6.3 percent from a net profit of NT$2.47 billion, or NT$10.17 per share, in the first quarter of last year.
“First-quarter performance was in line with the company’s original expectations,” TPK chief financial officer Freddie Liu (劉詩亮) told an investors’ conference.
Revenue in the first quarter dropped 11 percent from the previous quarter to NT$40.48 billion due to a seasonal slowdown.
However, a higher gross margin lifted the company’s bottom line despite the revenue drop, Liu said.
A major client’s launch of new products helped improve the company’s product mix, raising its gross margin to 14.1 percent in the first quarter, from 13.9 percent in the final quarter of last year.
Margins also received a boost from the company’s equipment upgrade, Liu said.
For the second quarter, Liu said revenue might drop 10 percent from the first quarter, as weaker demand from end markets might drag down its major client’s shipments.
Nonetheless, net profit in the second quarter is expected to be flat from the first quarter because of an improving operating margin, Liu said.
TPK president David Sun (孫大明) said the company was looking to diversify its customer base to lower its reliance on a single client, amid market worries that Apple’s possible adoption of an in-cell touch panel for its “iPhone 5” would erode TPK’s business.
The company has expanded its client base to more than 30, Sun added.
He said that sales from the company’s major customer would only account for 37 percent of the total next year, compared with 63 percent last year, if it decides to opt for in-cell technology.
TPK remained optimistic that this would not have a large impact on the company’s performance, saying that demand from other customers and for other products — such as new tablet products using Microsoft’s forthcoming Windows 8 operating system and notebook computers with touch function — could offset the negative impact.
The company still expects revenue in the second half of the year to be higher than in the first half, Sun said.
TPK shares rose 1.32 percent to close at NT$385 yesterday, Taiwan Stock Exchange data showed.