MediaTek Inc (聯發科), which supplies handset chips to China Mobile Ltd (中國移動) and Xiaomi Corp (小米), yesterday posted quarterly net profit growth of 92.4 percent. The growth exceeded most analysts’ expectations and was boosted by strong smartphone demand from China and emerging markets.
The company’s net income jumped to NT$8.62 billion (US$32.78 million) in the quarter ending on Dec. 31, compared with NT$4.48 billion a year ago.
The fourth-quarter result brought the chipmaker’s overall net profit last year to NT$27.49 billion, up 76.8 percent from NT$15.55 billion in 2012, and its last-quarter profit beat the NT$8.31 billion estimated by Daiwa Capital Markets analyst Eric Chen (陳慧明) and the NT$8.59 billion predicted by Credit Suisse analyst Randy Abrams.
“MediaTek had high-speed growth last year, primarily benefiting from strong demand from China and emerging markets,” company president Hsieh Ching-jiang (謝清江) told investors in a teleconference.
The Hsinchu-based company more than doubled its smartphone chip shipments to 220 million units last year from 100 million units in 2012, Hsieh said. The company also shipped 20 million units of chips used in tablets for the first time last year, he said.
“This year, MediaTek will extend last year’s growth momentum and continue to benefit from Chinese and overseas brands,” Hsieh said.
Company revenue is expected to grow by a double-digit percentage this year from the record-high level of NT$136.06 billion last year, while operating margin is expected to climb to 20 percent this year from 18.6 percent last year, he added.
Smartphone chip shipments would grow more than 36 percent to about 300 million units this year, and 5 percent would be attributed to fourth-generation (4G), or Long-Term Evolution (LTE), chips, Hsieh forecast.
The company’s customers are likely to start shipping handsets equipped with its LTE chips next quarter and LTE system-on-chip solutions by the end of this year, the company president said.
For this quarter, MediaTek yesterday gave a better-than-seasonal forecast, expecting its revenue to shrink by between 2 percent and 10 percent to between NT$35.8 billion and NT$39 billion, from last quarter’s NT$39.8 billion. Smartphone and tablet chips accounted for about 65 percent of the company’s total revenue last quarter.
Hsieh attributed the sequential sales decline to factors such as fewer working days because of the Lunar New Year holidays and low seasonal demand for this quarter.
However, the quarterly contraction is a smaller-than-average seasonal decline, he added.
Gross margin is expected to improve to between 45 percent and 48 percent this quarter, from last quarter’s 45.7 percent, thanks to rising high-end chip shipments, the company said.
MediaTek also expects shipments of higher-priced octa-core chips to account for about 5 percent to 10 percent of the company’s overall 65 million smartphone chips this quarter.
MediaTek gave a “not bad first quarter guidance and [a] strong 2014 outlook,” Daiwa Capital Markets’ Chen said in a research note.
He retained a “buy” rating on the company’s shares, which plunged 1.72 percent to close at NT$400.5 ahead of the teleconference.
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