Thu, Jun 06, 2013 - Page 14 News List

Catcher revenue weakens

FACING CHALLENGES:An analyst said Catcher’s gross margin could shrink from this quarter’s 42.2 percent and downgraded the firm’s shares to ‘sell’ from ‘buy’

By Kevin Chen  /  Staff reporter

Metal casing manufacturer Catcher Technology Co (可成科技) yesterday reported weaker-than-expected revenue for last month because of slow sales of Apple Inc’s MacBook Air notebook and iPad mini tablet.

If sales this month continue to see limited growth, the company might not be able to meet its sales guidance for this quarter, analysts said.

Catcher, which also supplies metal casings for Apple’s iPhone and HTC Corp’s (宏達電) smartphones, saw its consolidated revenue last month drop 3.4 percent from a month earlier to NT$3.49 billion (US$116.8 million).

On an annual basis, Catcher’s revenue last month was up 6.1 percent from the same month last year, the company said in a statement.

The company’s combined sales in April and last month reached NT$7.11 billion, which means Catcher would have to generate between NT$2.4 billion and NT$2.77 billion in sales this month if it is to see this quarter’s revenue reach its previous estimate.

On March 29, Catcher chairman Allen Horng (洪水樹) told an investors’ conference that the company would see revenue increase by between 3 percent and 7 percent quarter-on-quarter this quarter from last quarter’s NT$9.23 billion.

“If June sales do not pick up significantly there could be downside risk to its second-quarter sales guidance,” Citigroup Global Markets Inc analyst Wei Chen (陳思維) said in a note on Monday.

Chen forecast Catcher’s second-quarter revenue would increase 10 percent from the previous quarter, which is lower than market consensus of a sequential increase of 17 percent, citing a less upbeat view about MacBook and HTC phone shipments this quarter.

Catcher also faces a challenge to enlarge its earnings growth in the high-end device market, CLSA Ltd Taipei branch analyst Skye Chen (陳淑玲) said in a separate note on Tuesday.

She said Catcher’s strategy to diversify its client base should result in more sales stability compared to its peers such as Foxconn Technology Co (鴻準) and Casetek Holdings Ltd (鎧勝) as well as China’s BYD Electronic (比亞迪).

However, “second-tier players are catching up technologically, putting its premium pricing at risk,” Skye Chen said.

As a result, CLSA forecast Catcher’s gross margin to shrink from this quarter’s 42.2 percent and downgraded the company’s shares to “sell” from “buy,” with a lower target price at NT$138.6 from the previous NT$186.

Catcher closed 2.17 percent lower at NT$158 yesterday.

Meanwhile, Largan Precision Co (大立光), which also counts phone makers such as HTC, Apple, Nokia Oyj and Research In Motion Ltd (RIM) as major customers, yesterday said its sales for last month increased 3 percent to NT$1.96 billion from April and grew 66 percent from the same month last year.

Total revenue for the first five months of the year expanded 50 percent year-on-year to NT$8.98 billion, the Greater Taichung-based maker of handset lenses said in a press release.

The company said this month’s sales would remain flat from last month due to seasonal factors, but reiterated its earlier guidance that sales will grow significantly in the second half of the year.

Analysts expect the company’s business in the second half to benefit from the trend toward high-pixel resolution lenses in China and new shipments to South Korean clients such as Samsung Electronics Co and LG Electronics Co.

Shares of Largan rose 0.1 percent to NT$991.

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