Fri, Feb 07, 2014 - Page 13 News List

Catcher forecasts decline in revenue

NEW PRODUCTS:The outlook for this quarter was balanced by the expectation that customers will release new products, increasing demand for the firm’s metal casings

By Helen Ku  /  Staff reporter

Catcher Technology Co (可成科技), which makes metal casings for Apple Inc’s MacBook Air notebooks and iPad Mini tablets, yesterday forecast a 20 percent sequential decline in revenue this quarter due to slow seasonal demand.

The forecast would see Catcher’s revenue drop to about NT$10.92 billion (US$359 million) for the quarter from NT$13.11 billion last quarter.

However, chief financial officer James Wu (巫俊毅) said he expected the company to regain momentum next quarter and report quarterly growth driven by customers’ new products.

This year as a whole “will be another good year for Catcher if the company can implement its capacity expansion plan as scheduled,” Catcher chairman Allen Horng (洪水樹) told investors during an earnings telephone call.

To meet customer demand, Catcher plans to expand its casing manufacturing capacity for bigger-screen smartphones and wearable devices, Horng said. He did not give details.

The expansion will help Catcher shift away from PCs, which are in low demand, Horng said.

“This year, Catcher’s product mix will be adjusted and will include more casings designed for smartphones and wearable devices, as we see nearly every client making efforts to win in the new [wearable device] battlefield,” Horng said.

At least half of clients’ wearable device products would be equipped with metal casings “because they look more stylish,” Horng said.

To boost capacity, the firm plans to spend more than last year’s NT$9.6 billion on new equipment this year.

Last quarter, strong demand for new tablets ahead of the Lunar New Year holiday helped boost Catcher’s net profit by 25.3 percent quarter-on-quarter to NT$3.47 billion.

On an annual basis, Catcher’s net profit fell 24.2 percent because of a high comparative base resulting from foreign exchange gains.

That brought Catcher’s net profit for last year to a record high of NT$13.8 billion, up 27.6 percent from the NT$10.81 billion it made in 2012, according to the company’s financial report.

Currently, Catcher’s largest client is Apple, which contributes about 50 percent of Catcher’s total sales. The Greater Tainan-based company also counts Sony Corp, Samsung Electronics Co, HTC Corp (宏達電), BlackBerry Ltd, Hewlett-Packard Co and Dell Inc as its major clients.

“The capacity expansion plan should be tailored for Apple,” Deutsche Bank analyst Birdy Lu (呂家霖) said by telephone, adding that Catcher is prepared to supply metal casings for Apple’s anticipated iPhone 6 later this year.

Citing an industry survey conducted by Deutsche Bank, Lu said Apple is set to launch only one iPhone model this year, adding that the product is expected to be equipped with a 4.7-inch display.

While “it’s almost for sure” that Catcher will be the exclusive casing supplier for HTC’s new flagship smartphone, “chances are that HTC’s new smartphones will not stimulate huge market demand and therefore not benefit Catcher much,” Lu said.

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