Delta Electronics Inc (台達電), the nation’s top supplier of power supply units, yesterday posted its best quarterly net profits in seven quarters for last quarter as it shipped more high-margin products such as power supply units for servers and industrial automation parts.
Net income grew 9.2 percent to NT$4 billion (US$133 million), or NT$1.66 per share, during the quarter ending June 30, compared with NT$3.66 billion, or NT$1.52 a share, in the first quarter, according to the company’s financial statement.
Delta said 20 percent of the company’s net profits last quarter came from industrial automation products as rising labor costs in China boosted demand.
It said industrial automation products, of which 50 percent were exported to China, would be a potential growth driver for the company in the long run.
The second-quarter net profits marked the highest level since the third quarter of 2010 and exceeded the estimate of NT$3.31 billion by Credit Suisse analyst Pauline Chen (陳柏齡).
On an annual basis, the figure represented an annual expansion of 56 percent from NT$2.56 billion, or NT$1.06 a share. Chen rated Delta “out-perform” with a target price set at NT$106, according to a report issued on July 5.
Delta chairman Yancey Hai (海英俊) expected revenues to grow in the current quarter from last quarter’s NT$45.96 billion, supported by rising demand for power supply units for severs and passive components for mobile devices such as smartphones and tablets.
“The third quarter is usually a better period than the second quarter based on historical seasonal patterns. This year will be the same,” Hai told investors.
Gross margin would be steady, Hai said, compared with last quarter’s 23 percent, which was the highest level in eight years and an increase from 20.5 percent in the first quarter and 19 percent a year ago.
Hai said visibility for the fourth quarter was low because of uncertainty about global macroeconomy in the eurozone, US and Japan.
“Even economic growth in emerging markets like India and Brazil fell short of most people’s expectations, which will affect consumer consumption,” Hai said.
It was also unclear whether consumers would be willing to shop for new laptops running Microsoft Corp’s new Windows 8 operating system, or for Ultrabooks, Hai said.
Hai, who succeeded Delta founder Bruce Cheng (鄭崇華) as company chairman in June, said the company would stick to its long-term target of delivering 25 percent in return on equity (ROE). Last quarter, ROE stood at more than 19 percent, he said.
Power supply units and other components accounted for 61 percent of the company’s revenue last quarter, Delta said.
Industrial automation and solar business made a combined 21 percent, it said. Revenue from its solar subsidiary DelSolar Co (旺能光電) plunged 50 percent sequentially last quarter on oversupply.
In other news, Delta yesterday obtained an approval from the National Science Council to invest NT$250 million in an automation system manufacturing subsidiary in the Central Science Park.