TPK Holdings Co (宸鴻), which counts Apple Inc as its top client, yesterday reported better-than-expected quarterly profits for last quarter as it shipped more higher-margin touch panels for tablets.
The company now expects new notebook computers running on Microsoft Corp’s Windows 8 operating system to fuel demand and drive its quarterly revenue to set an all-time high this quarter.
During the July-to-September quarter, the touch-screen maker saw its net income grow about 3.06 percent to NT$3.03 billion (US$104 million), or NT$9.46 per share.
That was compared with a net income of NT$2.9 billion, or NT$9.24 a share, in the second quarter.
TPK originally expected the third-quarter to be flat in terms of its bottom line, but last quarter’s figure represented a 17.4 percent contraction from NT$3.63 billion, or NT$11.45 a share, in the third quarter of last year.
This quarter, “the momentum is in the notebook,” TPK executive financial official Freddie Liu (劉詩亮) told investors.
“Momentum in Ultrabooks and tablets is also very strong because almost all PC brands aim to launch their new products for the Christmas shopping season. There is the Windows 8 effect, too,” Liu said, adding that TPK would benefit from the sale of notebooks and tablets running Microsoft Corp’s new operating system, which features touch function.
Strong demand has caused “supply constraint. We cannot fully satisfy customer demand,” he said.
For this quarter, revenue is expected to soar by 30 percent from last quarter’s NT$35.63 billion, beating the 20 percent growth which was estimated by most analysts and which brings the company’s revenue to “an historical high,” Liu said.
TPK’s optimism is built on its higher-than-expected revenue for last month, which was released yesterday. Sales jumped 26.6 percent to NT$16.94 billion from September’s NT$13.38 billion, hitting its highest level in 10 months, the company said. That represented an annual expansion of 26.89 percent from NT$13.35 billion.
“October revenue is better than we previously estimated. Revenue in November and December will be also better than we thought,” Liu said. “We expect significant annual growth in the fourth quarter in both revenue and profitability.”
In this quarter, operating profit margins are likely to increase 0.5 percentage to hit around 11.6 percent, from 11.1 percent last quarter, Liu said. He attributed the expansion to improvement in equipment loading rates, as well as a growth in the shipment of notebook touch screens.
Mark Chen (陳彥廷), an analyst with SinoPac Securities (永豐金證券), said the company’s forecast was “aggressive” and that the big growth could lead to a “significant dive in revenue in the first quarter of next year,” citing uncertainty over the uptake of Windows 8 laptops.
Chen said he once offered TPK shares a “sell” rating after Apple stopped using its touch screens for its latest smartphone — the iPhone 5. Now, he says he has changed his mind as the adverse impact from Apple has been reduced in light of a rebound in gross margin to 17.9 percent from 16.7 percent in the second quarter.
In response to Chen’s concerns, Liu said he did not expect a substantial decline in revenue in the first quarter of next year as the impact from seasonally weak PC sales would be small, given that TPK generates less than 10 percent of its revenue from notebook touch screens.
Revenue from touch screens used in notebooks and tablets rose to 54 percent of last quarter’s revenue, from 41 percent in the second quarter and 36 percent in the third quarter of last year, the company’s financial statement showed. Revenue from Apple accounted for 55 percent of the company’s total revenue, down from 76 percent in the second quarter, the company said.
Operating margins would rise 0.5 percentage points to about 11.6 percent this quarter, from last quarter’s 11.1 percent and 10.6 percent in the second quarter, Liu said.
Separately, Wintek Corp (勝華) — which also supplies touch panels to Apple — reported a 12.84 percent decline in revenue for last month to NT$1.25 billion, compared with NT$9.72 billion in September, according to a company statement released on Monday. On an annual basis, that represented 51.25 percent growth from NT$5.6 billion.
Wintek expected revenue to drop 15 percent this quarter from last quarter as sales of Apple’s previous-generation iPhone 4 and iPhone 4S fell, coupled with a reduction in demand for Google Inc’s tablet Nexus 7, Credit Suisse analyst Jeffrey Su (蘇厚合) said in a report.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six